What Fees Can I Expect At A House Closing?

There are several fees that will be paid at closing, in addition to your down payment (if you are making one). RESPA requires all buyers receive a copy of the Uniform Settlement Statement. This statement will show the types of fees and the exact amounts, along with the total amount needed at closing. This is required to be given to you 1 business day before closing.


Statutory Costs: These are expenses you pay to local and/or state agencies. This is not only for buyer's taking out a mortgage, but also cash buyer's. Fee's may include:


Transfer taxes: Fees to transfer the title and deed from the seller to the buyer.


Recording Fees for deed: Fee for the county clerk to record the deed and mortgage.


Other state & local fees: May include mortgage taxes levied by states.


Pro-rated taxes: These are normally based on the exact number of days of ownership. These taxes may include school taxes.


Third Party Costs: Expenses paid to inspectors and/or insurance companies. These costs are for cash and mortgage buyer's. Some examples are:


Attorney fees: It is at the buyer's discretion as to if an attorney is used when purchasing a home.


Title Search Cost: This is used to verify a clear title.


Homeowner's Insurance: The majority of lender's will require a buyer to prepay the 1st year's homeowners insurance. (also called hazard insurance)


Real Estate Sales Commission: The seller normally pays the commission to the real estate agent at closing.


Finance & Lender Charges: Charges will vary among lenders. It is always a great idea to shop around. You want to find the best mortgage terms and closing(settlement) costs. Some of the charges may include:


Origination & Application Fees: This fee is for processing the application for a mortgage. This can be a flat fee or a percentage.


Credit Report: Most lenders will require this. This fee may be part of the origination fee.


Points: A point is equal to 1% of the total amount borrowed. Points may be paid when the buyer's loan is approved or at the time of closing. There are some lender's that will let you finance points.


Lender's Attorney Fee's: Lender's may have their attorney's draw up papers making sure the title is clear.


Document Prep Fees: This is for all of the loan paperwork. Sometimes this will be included in the application fee.


Preparation of amortization schedule: Lender's will provide a detailed amortization schedule for the full term of your loan. This will be used mostly with fixed mortgages.


Land Survey: Most lenders require the property being financed to be surveyed.


Appraisals: Professional appraisers compare the value of the property to similar properties in the neighborhood.


Lender's Mortgage Insurance: If the buyer's down payment is less than 20-25%, most lender's require buyers to purchase private mortgage insurance(PMI) for the amount of the loan. This amount will be added to your monthly payment.


Lender's Title Insurance: One time insurance premium, normally paid at closing. This is for the lender only.


Release fees: If the seller has worked with a contractor, fees may be required for the seller to pay to release the lien.


Inspections required by the lender: FHA & VA mortgages require termite inspections. Most buyers pay for this with their "normal" inspection.


Prepaid interest: Your 1st new mortgage payment is usually due 6-8 weeks after closing. Interest costs start at closing. Some lenders require this amount to be paid at closing.


Escrow Account: The buyer may request that the seller set up an escrow account to help cover: radon mitigation procedures, house painting or other items.