Common Closing Costs for Buyers


Your lender must disclose a good faith estimate of all settlement costs. A check to cover your closing expenses will most likely have to be in the form of a cashiers check. It is up to the closing entity, in most cases the closing attorney, to tabulate your closing costs. You and your agent will be informed of the total amout due from you at closing. These costs include but are not always limited to:

  • Downpayment
  • Loan origination fees
  • Points, or loan discount fees you pay to receive a lower interest rate
  • Appraisal fee
  • Credit report fee
  • 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 taxes and insurance for you.
  • Deed recording fees
  • Title insurance policy premiums
  • Survey
  • Inspection fees
  • Notary fees
  • Pro-rations for your share of costs such as property taxes and utilities

A note about pro-rations.

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.

What to keep from you closing.

The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called the HUD-1 form, itemizes all the costs associated with the closing. You'll need this statement for income tax purposes and when you sell the home.

  • The Truth in Lending Statement summarizes the terms of your mortgage loan
  • The mortgage and the note spell out the legal terms of your mortgage obligation and the agreed upon repayment terms
  • The deed transfers ownership of the property to you
  • Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
  • Riders are amendments to the sale contract that affect your rights. For example, if you buy a condominium, you may have a rider outlining the condo associations rules and restrictions.
  • Insurance policies to provide a record and proof of your coverage