When purchasing a home, financial considerations go beyond the sales price. One crucial expense that many homebuyers often overlook is closing costs.

Closing costs are the final expenses that must be paid to complete a real estate transaction, such as taxes, lender fees, and title insurance. Let’s break down what closing costs are in Nebraska, who pays them, and what costs you can expect as a buyer and seller.

How much are closing costs in Nebraska?

Before the home buyer receives the keys to his new home, he must pay closing costs. Closing costs in Nebraska are typically 2-5% of the purchase price of the home. Keep in mind, however, that this is just a range and the total amount will depend on many factors, such as the purchase price of the home, the type of loan, and any adjustments negotiated with the seller.

Let’s say you’re buying a home in Omaha, where the median sales price is $275,000. Based on that, you could expect closing costs to range from $5,500 to $13,750. On the other hand, if you’re buying a home in Lincoln, where the median sales price is $292,500, closing costs could range from $5,850 to $14,625.

Who pays closing costs in Nebraska?

In most areas, including Nebraska, both the buyer and seller pay closing costs. However, buyers and sellers pay different closing costs and will likely have different total closing cost amounts. Also, keep in mind that buyers typically pay closing costs out of pocket, while the seller’s closing cost payments are often deducted from the proceeds of the home sale.

Closing Costs for Buyers in Nebraska

As a home buyer in Nebraska, you can expect to pay between 2% and 5% of the purchase price. In most cases, you will pay a down payment, usually 1% to 3% of the home price, when you mutually agree to purchase your home. This down payment will be deducted from your closing costs, reducing the total amount at closing. Below are some of the common closing costs the buyer will pay:

• Valuation fee: Your mortgage lender will require a home appraisal to ensure the home value is equal to or greater than the loan amount. Home appraisals typically cost between $300 and $500, depending on location. If you pay at the time of service, this is not included in your closing costs.
• Examination fee: Although a home inspection is not required, it is highly recommended. The cost of a home inspection generally ranges from $300 to $500 and is usually paid at the time of service. If that is not possible, payment must be made at closing.
• Loan processing fee: Your lender may charge a fee to provide your loan. It’s important to ask what these costs cover and whether they’re negotiable to avoid potentially high costs.
• Processing fee for the loan: In addition to the origination fee, your lender may also charge a fee to process your loan. This typically covers credit checks and related services. It is recommended that you discuss this fee with your lender to understand what this fee covers and whether it can be waived.
• Credit discount points: If you purchased points to lower your interest rate, you typically pay a one-time fee at closing. Each point can lower your interest rate by 0.25% to 0.5%. Before purchasing points, consider how long you plan to own the home or if you plan to refinance.
• Private Mortgage Insurance (PMI): If your down payment is less than 20%, you’ll typically have to pay private mortgage insurance (PMI). Some loans allow you to pay PMI up front at closing, giving you the option of making higher down payments or higher monthly payments.
• Title insurance: Title insurance is a one-time closing fee, with the buyer typically paying for both the lender’s and the owner’s policy.
• Building insurance: In Nebraska, your annual homeowners insurance premium may be part of your closing costs.
• Contributions to the homeowners association: For homes in HOA-managed communities, you may be required to pay a monthly fee upon completion of the purchase. This can vary depending on the property and covers maintenance and operating costs.
• Property taxes: In Nebraska, buyers may be required to pay property taxes up front as part of their closing costs.

Seller’s Closing Costs in Nebraska

Closing costs paid by sellers in Nebraska can vary, but here are some common closing costs paid by sellers: