What are closing costs?
Closing costs are expenses incurred by borrowers (and sellers in the case of purchase transactions) when obtaining a new mortgage loan and transferring property. Non-Recurring Closing Costs (NRCCs) are costs that are only charged in connection with obtaining a new mortgage loan. Examples of NRCCs would include: origination fee, title insurance, settlement agent fee, notary fee, commitment/administration fee, or appraisal fee.
A. Closing costs are the various costs associated with the transfer of property to a buyer or seller. A buyer paying cash has very little in closing costs. Typically only the cost of recording the deed in County Records, closing fee to the title company, often a processing fee to the real estate company. At your option, there may be a survey and termite inspection to pay. In all, it should be less than $1000. A buyer getting a mortgage incurs closing costs which will vary by lender. Only the lender can tell you their costs. In addition to lender costs, there will be a professional appraisal, documentary tax on the deed at $3.50 per $1000 of the loan amount, intangible tax on the mortgage at $2 per $1000, termite inspection (unless it’s a condo), land survey (unless it’s a condo), title insurance for the lender, wiring fees. Sellers will pay at closing brokerage fee or commission, title insurance for the buyer, documentary stamps on the deed at $7.00 per $1000 of sale price, closing fee
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. Some of the closing costs you might encounter are: discount points, escrow fee, documentation fee, homeowners’ association fees, pest/rot inspection, real estate commission and title insurance premium.
Closing costs and procedures vary from state to state and from county to county. In some jurisdictions, an attorney represents the lender. In others, the title company represents the lender. There may be state or county transfer taxes to be paid. There may also be fees for recording certain documents. There are also standard charges that are paid at all closings. Taxes, title insurance premiums, and interest on the loan pro-rated from the closing date to the end of the month.
