Real Estate Closing Costs
The last step before you get the keys to your new home or completing your refinance is signing the loan documents, which includes settling the closing costs.
Wondering what real estate closing costs are? They are the fees associated with a loan closing, typically amounting to 2-5% of the loan principal. There are various closing cost components that vary from state to state.
For more information on real estate closing costs, contact Matheson Law Firm online or call us at (704) 439-1350.
What Fees Are Associated With Closing Costs?
- Appraisal fee – The appraisal fee pays for a licensed professional to determine what the home’s value before a lender extends a mortgage offer. It typically ranges from $500 to $750 (or more) to estimate the market value of a single-family home. This is generally paid upfront to the lender as part of the application fee.
- Credit report fee – The credit report fee is what the lender charges to check your credit score and obtain a credit report. This fee is $25 or more per individual borrower on the loan.
- Origination fee – The origination fee is the charge for initiating the loan.
- Application fee – The application fee is a charge of several hundred dollars to process the application.
- Flood certification fee – This is a lender fee to obtain a report to determine whether the property is located within a flood zone.
- Tax certification fee – This is a lender fee to obtain a report regarding the property taxes.
- Title search fee – This fee is paid to the attorney who searched the title to the property to determine ownership and what liens, easements, and restrictions encumber the property title.
- Settlement fee – This fee is paid for the preparation of the settlement statement, conducting the closing, and disbursing the funds. This may also be called an attorney fee.
- Title insurance fee – This is paid to the title insurance agent to insure the transaction for the lender and to insure the title for the new owner. This fee is promulgated by the state and is calculated based on the purchase price and/or loan amount.
- Recording fee – This is the fee paid to the county to record the deed and/or deed of trust (aka mortgage). Generally, $26 for the deed and $64 for the deed of trust.
- Survey fee – This is optional but highly recommended. This is fee pays for someone to go out and measure the land and mark the location structures on the property. This fee is typically $500 to $750 (or more).
- Homeowners association fee – These fees are for homeowners association dues that may be paid in advance and some associations charge a capital contribution to be paid upon the purchase of the home.
- Other fees – This list is not exclusive. It only represents some of the common charges associated with residential real estate closings.
What You Need to Know About Real Estate Closing Costs
It’s important to remember that closing costs are often higher than most borrowers initially assume they are. Budgeting for closing costs, in addition to the down payment, is helpful.
The key throughout this process is to be patient and prepared since homebuying can be lengthy. Don’t rush into what will likely be the largest purchase of your life.
Have further questions about real estate closing costs or other factors related to the homebuying process? Contact Matheson Law Firm online or call us at (704) 439-1350.