Lenders could benefit from coaching consumers on home purchase costs
Lenders should better prepare mortgage borrowers on all costs and fees associated with a home purchase, particularly as affordability remains a top issue for buyers.
The typical first-time homebuyer puts 15% toward a down payment, which amounts to $32,700 for the average July property amount of $218,000, according to a Zillow report.
House shoppers should also anticipate spending an average of $40,000 in one-time fees for the typical home, according to an analysis by Zillow brand RealEstate.com and online professional service network Thumbtack.
Closing costs tack on $6,250 in borrower expenses for a median home.
Rising home prices and constricted housing supply continue working against mortgage lenders, so it would behoove them to leverage both education opportunities and product offerings, particularly because millennials make up the largest share of homebuyers and are most unfamiliar with the purchase process.
Ancillary home buying costs also create opportunities for lenders providing other consumer lending products, like credit cards. Eight hours of local moving, installing new locks, mounting a television, and full interior and yard cleaning amount to an average of $1,130.
Of all metropolitan areas, closing costs are highest for homebuyers in New York and Boston, and moving costs are highest for those in Minneapolis and Portland, Ore.
"Buying a home, especially for the first time, is an exciting but stressful experience. Some of that stress can be eased by making sure you know all of the costs that come with buying and owning a home, so you can budget appropriately and not get caught off guard well into the buying process," said RealEstate.com General Manager Justin LaJoie in a press release.