A GUIDE TO CLOSING COSTS
BUYER CLOSING COSTS
Origination Fee: Payment to lender to evaluate your credit and underwrite and process loan
Discount Points: Paid to lender at closing to reduce interest rate over life of mortgage
PMI (Private Mortgage Insurance): Required if down payment is less than 20%. This protects the lender if you default
Appraisal Fee: Paid to the appraiser to confirm the home’s fair market value.
Title Search: Covers cost to confirm seller owns property and that it is free from liens.
Title Insurance: Protects lender and (optionally) you if a title claim surfaces later.
Termite Inspection: Inspection required to certify the home is free of termite damage.
Survey: Charge to verify property boundaries.
Flood Certification Fee (if applicable): Covers cost to determine if home is in federally designated flood zone.
Prepaid Interest: Covers mortgage interest due between date of closing and first mortgage payment.
Prorated Property Tax: Covers property taxes from date of closing to end of tax year.
Homeowners Insurance: Typically, you’ll pay full first year cost upfront before or at closing.
HOA Transfer fee: Paid on properties governed by associations to transfer ownership documents to you.
Initial Escrow: Lender may require first two months of next year’s homeowners insurance, flood insurance and property taxes to build up reserve.
Doc Stamps preparation (if applicable)
All new loan charges (except those required by the Lender for Seller to pay)
Assumption/Change of Records fees for taking over existing loan)
Beneficiary Statement fee for mortgage assumption
Home Warranty (sometimes covered by Seller)
Closing/Settlement Fee: Paid to title company, attorney or escrow company that conducts closing.
Transfer Tax: Paid to state, based on the amount of the mortgage.