Buyer Closing Costs
You'll likely be responsible for a variety of fees and expenses that you and the seller will have to pay at the time of closing. (Updated 3/19/17) Your lender must provide by law a good-faith estimate of all settlement costs (HUD-1). The title company or your attorney conducting the closing will tell you the required amount for:
- Down payment
- Loan origination
- Points, or loan discount fees, which you pay to receive a lower interest rate
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowner's insurance, if being paid as part of your mortgage payment
- Property tax escrow - Lenders keep funds for taxes and insurance in escrow accounts that are paid with your mortgage. When your taxes/insurance come due in the future, your lender pays the insurance or taxes for you. The normal is usually 3 months in escrow.
- Deed recording
- Title insurance policy premiums (buyers portion)
- Notary fees
- Document Prep Fees/FedX Shipping Fees
- Closing itself at the title company
A Note About Prorations - Because some buyers closing costs are paid on a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. 'Proration' is a way for the sellers to pay you back or for you to pay them for bills they have paid in advance.
For example, if your association fees are $100 per month, the seller paid those fees up to the end of the month which is the 30th. If you close on the 27th, you would owe the seller for 3 days of association fees which he has paid in advance. (30-27= 3 OR $100 divided by 30 = $3.33 X 3 days = $9.99) The bill is 'prorated' for the number of days in the month, and then each person would be responsible for the days of his or her ownership.
A FEW NOTES ABOUT CLOSING - You must bring a certified or cashiers check to closing payable to yourself (your name) and then endorse the check over to the title company. You must bring your drivers license as identification. You must also bring a paid one years homeowners insurance policy (if applicable) with you that will be given to the lender at closing. If you are bringing a larger down payment to closing (over $50,000) you will be required to wire transfer the funds. THERE ARE NO EXCEPTIONS.
These buyers closing costs are customary for the State of Illinois. Obviously if you are in another state, customary charges could be different.
Cook County Tax Prorations
Seller Closing Costs