Don’t let closing costs catch you by surprise!
There are two basic types of closing costs, recurring and non-recurring.
Recurring include the ongoing expenses you will be paying on a yearly or monthly basis like interest, property taxes and insurance.
Non-recurring costs are the one time fees associated with buying a home like the appraisal and escrow fees.
Here’s an estimate to give a general idea of what to expect when you buy a home. Keep in mind, some of these numbers are based on the price of the home. For this example, let’s assume it’s for a $500,000 home.
Notice that the buyer pays no commission to the real estate agent 🙂
Non-Recurring
| Lender Fees | |
|---|---|
| $900 | Underwriting |
| $500 | Appraisal |
| $50 | Credit Report |
| $70 | Tax Service Fee |
| $10 | Flood Certificate |
| $0 | Points on the loan |
| Escrow/Title Fees | |
|---|---|
| $1500 | Escrow Fee - $500 base + $2.00 per $1000 |
| $250 | Loan Tie In |
| $200 | Notary |
| $150 | Doc Prep Fee |
| $50 | Messenger |
| $500-$800 | Lender's Title Policy |
| $50 | Sub Escrow Fee |
| $150-$300 | Endorsments |
Recurring
| Recurring Costs | |
|---|---|
| Interest on Loan | Varies depending on closing date |
| Fire Insurance | First Year Upfront |
| Property Tax | Prorated through Escrow |
In this example, the closing costs would be around $4500 + the recurring costs. Keep in mind that in addition to the down payment and closing costs, the lender will want to see that you have at least a couple of months worth of payment saved too.
