Common Closing Costs for Buyers

The lender must disclose a good faith estimate of all closing costs. A check to cover your closing costs will probably have to be a cashier's check. The title company conducting the closing will tell your agent the required amount for:

1. Down payment
2. Loan origination fee
3. Points, or loan discount fees you pay to receive a lower interest rate
4. Appraisal fee
5. Credit report
6. Private mortgage insurance (PMI) fee
7. Insurance escrow for homeowners insurance, if being paid as part of the mortgage payment
8. Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
9. Deed recording fees
10. Title insurance policy premiums
11. Survey (if needed)
12. Notary fees
13. Prorations for your share of costs, such as utility bills and property taxes.

A Note About Prorations
Because such costs are usually paid on either 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 may have paid in the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end of the month. The seller would owe for the first 5 days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2003. All rights reserved.

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