What are Buyers Closing Costs?

When you purchase a home there are many costs and fees that are associated with the purchase of home.  Many buyers think that if they can 100% loan they won't need any cash at closing.

The Down-payment (or lack thereof) is only a part of the closing cost of buying a property. 

Here is a breakdown of costs and fees associated with buying a property in Washington DC. Estimates are averages based on a sale price of $300,000.

Loan Origination Fee: ??                      - Some loans have a loan Origination Fee.  See more info below *

Loan Discount: ??                               - Many times it's possible to "Buy-Down" your interest rate. See below** 

Appraisal Fee: $300-$450                    - The lender will send out their Appraiser to estimate the property value

Credit Report Fee: $ 20 - $60               - Same reports - different fees.  Anything over $30 is too much!

Underwriting Fee: $200 - $400              - Another Lender Fee       

Tax Service Fee: $75 - $95                   - Fee for setting up an escrow acct/company to pay the property taxes

Settlement/Processing Fee: $250          - Another Lender Fee 

Application Fee: $500                           - Only Some Lenders will charge this - Question it and ask why!

Broker Admin Fee: $200 - $300             - Fee charged by Real Estate Brokers

Attorney Fees: $200 - $400                  - Charged by Title/Escrow Company for transaction

Title Search: $250                               - Paid to search the public record

Title Exam: $65                                   - Paid to Examine the public records for the property

Title Insurance Binder: $75                    - A fee for the Title Insurance Company

Lenders Title Insurance: $500 -$1000   - Based upon LOAN amount -  Insures Lender     

Owners Title Insurance: $1000 - $1500    - Insures Owner against problems with the Title to the property 

(Different Title Co's divide totals in different ways - TOTAL Title Insurance $1500 - $1700 for 300k home)

Notary Fee: $50                                    - Charged by some Title/Escrow Companies

Overnight Charges: $50-$75                  - Charged by Title Co to send completed Loan Packet to Lender

Recording Fee/Tax Stamps: $75-$175     - Fee charged by Local Government to record the new loan/deed

Transfer Tax: $3300                              - TAX - IN DC 1.1% to 1.4%.  Based upon Purchase price.

Survey: $150 - $250                              - Most lenders will require a survey. (NOT needed for condos)

Flood Certificate: $10 - $20                    - Fee charged to determine if property is in a Flood Zone

PRE-PAID Items

Interest: ??                                          - Pay at closing the interest for the days left in the current month

Hazard Insurance: $300 - $500              - 1st Years Home Owners Insurance (NOT required for Condos)

Hazard Ins in RESERVES: ??                    - 2-3 months of Home Owners Insurance put in escrow.

Property Tax (3-6 months): ??                - Lenders require this in Escrow. Based on next Tax due date           

Pro-Rated Condo Fee: ??                       - Monthly condo fee / # of days left in current month

Condo Fees: ??                                    - Most Condos require collection of 1st months condo fees at closing

Move-IN Fees: $150 - $400                    - SOME Condo Buildings charge this fee.

Pest Inspection: $30 - $100                   - Required by lender unless in a mid/high-rise building

Home Inspection: $300 - $600               - Based upon size of property

* Loan Origination Fee:  Most loans should not require an origination fee.  Unless it is a special program or you have less than perfect credit.

** Loan Discount Fee: Some buyers opt to pay up front for a lower interest rate over the life of the loan.  A good idea if you plan on living in the home for a LONG time (7+ years). For more READ THIS

 One the biggest Issues I find is that banks and title companies have different names for each of the many fees.  One lender may have an application fee - but no underwriting fee.  Or they have a processing fee instead of a Document Review fee.

When comparing lenders; ask for a GOOD Faith Estimate (somewhat standard form in writing) from each.  Look at the total closing costs.  If number are WAY off from lender to lender ask why!  It is also a good idea to ask your Realtor take a look at the numbers.

Happy Home Buying!