Common Closing Costs for Buyers
The lender must disclose a good faith estimate of all settlement
costs. A check to cover your closing costs will probably have to be a
cashier’s check. The title company or other entity conducting the
closing will tell you the required amount for:
- Down payment
- Loan
origination fees
- Points, or loan discount fees, you pay to
receive a lower interest rate
- Appraisal fee
- Credit
report
- Private mortgage insurance premium
- Insurance
escrow for homeowners insurance, if being paid as part of the mortgage
- Property
tax escrow, if being paid as part of the mortgage. Lenders keep funds
for taxes and insurance in escrow accounts as they are paid with the
mortgage, then pay the insurance or taxes for you.
- Deed
recording fees
- Title insurance policy premiums
- Survey
- Inspection
fees—building inspection, termites, etc.
- Notary fees
- Prorations
for your share of costs, such as utility bills and property taxes
A
Note About Prorations:
Because such costs are usually paid on
either a monthly or yearly basis, you might have to pay a bill for
services used by the sellers before they moved. Proration is a way for
the sellers to pay you back or for you to pay them for bills they may
have paid in advance. For example, the gas company usually sends a bill
each month for the gas used during the previous month. But assume you
buy the home on the 6th of the month. You would owe the gas company for
only the days from the 6th to the end for the month. The seller would
owe for the first five days. The bill would be prorated for the number
of days in the month, and then each person would be responsible for the
days of his or her ownership.