Don’t let closing costs catch you by surprise!
There are two basic types of closing costs, recurring and non-recurring.
Non-recurring costs are the one time fees associated with buying a home like the appraisal and escrow fees.
Recurring include the ongoing expenses you will be paying on a yearly or monthly basis like interest, property taxes and insurance.
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 $1 mil home.
Non-Recurring
| Lender Fees | Amount |
|---|---|
| Lender Origination Fee (points) | $0 |
| Appraisal | $600 |
| Credit Report | $50 |
| Tax Service Fee | $79 |
| Processing Fee | $500 |
| Underwriting | $995 |
| Funding Fee | $400 |
| Loan Total | $2,624 |
| Escrow/Title Fees | Amount |
|---|---|
| Escrow Fee (based on price of home) | $2500 |
| Loan Tie In | $250 |
| Notary | $250 |
| Doc Prep Fee | $275 |
| Messenger | $65 |
| Remax One Processing Fee | $495 |
| Policy Endorsements | $100 |
| Wire Fee | $30 |
| Lender's Title Policy (based on price of home) | $1400 |
| Sub Escrow Fee | $62 |
| Recording Grant Deed | $50 |
| Recording Trust Deed | $100 |
| Escrow/Title Total | $5,577 |
Non-Recurring Estimate Total: $8201
Recurring
| Recurring Costs | |
|---|---|
| Interest on Loan | Varies depending on closing date |
| Fire Insurance | First Year Upfront |
| Property Tax | Prorated through Escrow |
When you receive an estimated closing statement, the amount for closing costs may be more than you expect. That’s because the recurring costs (expenses you will have going forward) will be included along with the one-time non-recurring closing costs.
For instance, if your new home closes on April 15th, your first payment won’t be May 1st, it will be June 1st so escrow is going to collect that 45 days worth of interest upfront. Same goes with your insurance. In most cases, you’ll pay the first year policy up front.
