Closing Costs
Buying a home involves much more cash out-of-pocket than just the down payment. There are also closings costs to pay for things like title policies, recording fees, inspections, courier charges, reserves, and fees the lender charges.
Lender fees for the loan usually cost the most—these are disclosed in the Good Faith Estimate. Make sure you compare loan origination fees and points between various lenders.
How Much are Closing Costs?
As a rule of thumb, closing costs run from 2-4% of the purchase price. You can have your agent ask escrow to send you a closing cost estimate. You’ll need to add the lender fees to get your complete number. For example, closing costs to purchase a $300,000 home could cost anywhere from $3,000 to $12,000 or more.
Non-Recurring Closing Costs
Fees that are paid once and never again are called non-recurring. These fees are one-time charges for such items as:
- Escrow Fees
- Notary
- Title policies
- Wire fees
- Courier fees
- Recording
- State, County or City Transfer Taxes
- Natural Hazard Disclosures
- Lender fees—including loan origination fee, points, processing fees.
- Home Warranty Plans
Recurring Closings Costs – The Prepaids
Recurring fees are those charges that you will pay again and again. They include such fees as:
- Property Taxes
- Private Mortgage Insurance (if required)
- Prepaid Interest
- Home Insurance
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