Closing costs are all of the fees and expenses that buyers and sellers must pay on closing day and it is extremely important part of the closing process, but who pays for what?
Closing costs are paid based on the terms of the home purchase contract, which both mortgage parties agree on. The buyer’s closing costs are the most substantial, but the seller is often responsible for some closing costs as well. As in many contractural agreements closing costs can also be open to negotiation. While closing costs for sellers are often deducted directly from the home sale proceeds, buyers typically pay their portion out of pocket so it is best to be prepared.
While the contract dictates who pays what, here is a general breakdown of what buyers and sellers typically pay for in closing costs to help all parties save up and prepare for closing day.
Buyer
Attorney Fees
Appraisal
Property Inspections
Termite Inspection Survey
HOA Transfer Fee
Prorated Taxes
Half of Escrow Fee
Courier Fee
Hazard Insurance
Loan Origination Fee
Loan Title Policy and Endorsements
Homeowners Insurance
Credit Report
Prepaid Interest
Document Preparation
Recording Fees
VA Funding Fee
Initial Deposit for Escrow Account
Mortgage Insurance Premium
Seller
Payoff of Existing Loan
Realtor Commissions
Owner’s Title Policy and Endorsements
Repairs
Prorated Taxes
Half of Escrow Fee
Courier Fee
Tax Certificate
Document Preparation
Recording Fees
Survey
Termite Inspection for VA Loans
HOA Resale Certificate
Home Warranty
To sum things up if you’re buying or selling real estate you’ll need to budget for closing costs in addition to your down payment. These costs can vary based on the loan you choose, so it’s important to be aware of this when you shop around for your mortgage. Still have questions on closing costs? Not sure what mortgage lender to use? Contact our Willow Bend Title team. We work closely with reliable lenders who are experts in their field and eager to help you be fully prepared for closing day.