Home Buying Costs
Closing costs comprise the various expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property. Below is a summary of some of the common charges a buyer incurs when buying a home. The estimates below are based on a $600,000 purchase price.
| Home Buying Closing Costs | |
| Charge | Estimate |
|---|---|
| New Loan Charges | |
| Loan Origination Fee (fee charged by a lender for the cost of obtaining a new loan; 1% of loan amount but amount can vary) | Varies |
| Loan Processing Fee (paid to processor for cost for obtaining all relevant documents for your loan package) | $375 |
| Pre-paid Interest (interest from close of escrow until your first regular mortgage payment, usually six to eight weeks) | Varies |
| Appraisal Fee (charged by appraiser to determine the market value of the property) | $450 |
| Underwriting Fee (for cost of mortgage underwriter to evaluate your total loan application package) | $175 |
| Credit Report Fee (fee charged by credit reporting agencies to provide your credit report) | $25 |
| Title Charges | |
| Lender's Title Insurance Policy (covers the costs of assuring the lender that you own the home and the lender’s mortgage is a valid lien) | $550 |
| Sub Escrow Fee (for receiving loan proceeds from buyer’s lender and paying off existing liens and encumbrances against the property) | $50 |
| Endorsements to Title (for attachments to title insurance policy that alter the provisions of title policy to provide greater coverage) | $50 |
| Courier/Express Mail Fee (fee that the title company charges for a courier or overnight delivery service) | $50 |
| Escrow Charges | |
| Escrow Fee (fee charged by escrow company for escrow services; sales price times 2 plus $200 per side) | $1,400 |
| Loan Tie-In Fee (fee for the processing of loan documents) | $200 |
| Document Preparation Fee (courier or overnight delivery fees associated during the transaction) | $75 |
| Electronic Delivery Fee (for when a lender sends loan documents via e-mail which are accessed on secure server for confidentiality) | $100 |
| Property Tax | |
| Prorated Property Tax (amount from varies based on date transaction closes) | Varies |
| Tax Service Fee (cost for tax service agency to determine if there are any delinquent property taxes on a home) | $20 |
| Recording Charges | |
| Grant Deed Recording Fee (the county charges this for recording the grant deed) | $15 |
| Deed of Trust Recording Fee (the county charges this for recording the deed of trust) | $75 |
| Additional Settlement Fees | |
| Hazard Insurance Premium (homeowner insurance premium for one year; amount varies based on the size and quality of the home) | Varies |
| Notary Fee (charged by notary public for when buyer signs their loan documents and documents that need to be notarized) | $120 |
| Wire Fee (charged by the title company to pay for bank fee for when lender wires funds to bank of title company) | $100 |
| Flood Certification Fee (fee to determine if house is in a flood zone; federal law requires flood insurance if the property is in a flood zone) | $5 |
| Homeowner Association Dues (homeowner association fee for next month, if there is a homeowner association; amount varies) | Varies |
| Structural Inspection (fee paid to a home inspector to inspect the home and provide a physical inspection report) | $425 |
| Refundable Pad (Amount paid to avoid shortages when closing escrow; unused portion is refunded at the completion of the transaction.) | $300 |
The above fees are estimates. Particular transactions may have more or fewer charges than shown above. Actual fees will vary.
Settlement Statement
A settlement statement or closing statement is a document prepared by the escrow officer at the completion of a real estate transaction which itemizes the charges and credits of your account. The items shown on the statement include the purchase price, the funds deposited or credited to your account, payoffs on existing encumbrances and/or liens, the costs for all services, and a determination of the funds you are entitled to at the close of the escrow.
If anything on the settlement statement does not make sense to you, you should ask your escrow officer for an explanation. The settlement statement and all other escrow documents should be safely stored for income tax purposes and future reference.
