Closing the purchase of a home can often be a confusing experience. Below you can find an overview of the expenses generally associated with closing, as well as estimated costs. Note that these costs are estimates; actual costs may vary depending on the your specific situation. Please fill out my contact form if you'd like more information.
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| Buyer |
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ITEM
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DESCRIPTION
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AVERAGE COST
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| Loan Origination Fee |
This fee covers the lender's administrative cost in connection with the loan. |
1% of the loan amount
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| Discount Points |
A one-time charge used to adjust the yield on the loan to market conditions. |
Each point equals 1% of the loan amount. |
| Appraisal Fee |
A fee for a statement of property value made by an independent appraiser. |
$300-$500 conventional loan; $250 VA loan; $300 FHA loan |
| Credit Report |
A report obtained from a credit reporting agency detailing the borrower's credit history |
$50-$75 |
| Funding Fee |
Fee charged by the Veterans Aministration on all VA loans. |
2% of loan amount if veteran pays no down payment; 1.5% if 5% down payment; 1.25% if 10% down payment; 3% is veteran has used VA prior funding, not putting down minimum of 5%. |
| Interim Interest |
Collected on the loan from date of closing for the balance of the month when closed (except when closing takes place on the 1st day of the month). |
Interest rate X the loan amount divided by 365 = factor X number of days remaining in each month = interim interest. |
| Private Mortgage Insurance (PMI) |
Required on mortgages with a loan-to-value ratio of 80% and up. Some lenders require the entire premium paid at closing while others require a percentage at closing with monthly payments escrowed. Mortgage insurance protects the lender from loss due to payment default. Mortgage insurance can allow borrower to obtain up to 95% financing. |
Premiums vary with coverage. |
| Hazard Insurance |
Lenders require a fire (and extended coverage) policy covering at least the amount of the mortgage. If the property is in a flood prone area, flood insurance is mandatory. |
First year premium is paid at closing |
| Escrow Deposits |
Funds held in an account by the lender to assure future payment for such recurring items as real estate taxes, hazard insurance and mortgage insurance. |
2 months hazard insurance; 2 months mortgage insurance; 5 months taxes (average) |
| Attorney Fee |
Closing is normally handled by the Buyer's attorney. The attorney is responsible for obtaining title insurance, handling and computing the closing statement (including all prorations and adjustments) and recording pertinent documents. The deed is normally prepared by an attorney selected by the Seller. However, the Seller often chooses to use the Buyer's closing attorney for preparation of the deed. |
$450-$600 |
| Title Insurance |
Protects against loss due to problems or defects in the title which cannot be found or aren't found on public record. This insurance is required by the Lenders and the cost is borne by the Buyer. It is a one-time fee payable at closing. Both lenders' and owners' policies are available. Although not necessarily required by the lender, an owners' policy is strongly advised. |
$2 per $1,000 of coverage |
| Recording Fees |
Fees for deed, deed of trust, and any and all other documents |
$35 |
| Survey |
Required to show the exact locations of the house and the lot line, along with easements, buffers and setback lines. |
$200-$300 |
| FHA Mortgage Insurance |
Required by HUD. May be paid at closing or financed with loan amount. |
.0225 X loan amount (if financed) |
| Home Inspection |
The Buyer's option to have a home inspection per Provision 8. |
$200-$450 |
| Termite Inspection |
A report from a N.C. licensed pest control operator stating as to the evidence of wood-destroying insects and resulting damage. |
$55 |
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| Seller |
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| Deed and Lien Waiver Preparation |
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$75 |
| Transfer Taxes |
Transfer taxes in N.C. are computed on the selling price and are paid by the Seller |
$2 per $1,000 |
| Marketing Fee |
The sales commission paid to buyers and sellers real estate agents is paid by the Seller |
6% of final sales price |
| Prorated Real Property Tax |
Calculate tax from January first through the date of closing |
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| Mortgage Balance |
The balance due on Seller's outstanding mortgage is paid on the date of closing |
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| Repairs by Seller |
As agreed between Buyer and Seller |
Variable |
