What Is Included in Closing Costs?

Buying or selling a home is a major event in the lives of many Americans. Whether you are purchasing your first home or sitting on the seller side of the closing table, understanding your financial responsibility in the real estate transaction is important to ensuring you know what to expect from the process.

Preparing for a Home Closing

As the homebuyer, you will be informed of your closing costs on the CD (Closing Disclosure) Form, which is a document provided by the lender listing details of your loan, payment amounts and total closing costs for your purchase. Your lender will remit your CD form to you for your review at least three business days prior to your closing date. It is highly recommended that you review this document thoroughly, and ask any questions regarding its content or resolve any discrepancies prior to closing day.

What to Expect as the Buyer

In general, closing costs for homebuyers average between two and seven percent of the sale price. Closings costs for homebuyers typically include the following:

• Mortgage origination fee (if applicable)

• Loan discount points (if applicable)

• Mortgage insurance (if applicable)

• Prepaid mortgage interest

• Homeowner’s insurance

• Home appraisal fee

• Property taxes

• Transfer taxes

• Recording fees

• Title search fee

• Title insurance (Owner’s and Lender’s)

• HOA fees (if applicable)

• Survey (if requested)

• Other closing/escrow fees

What to Expect as the Seller

Even though you’re selling your home, you can still expect to pay some amount of closing costs, with the bulk of the financial responsibility deriving from the real estate agents’ commissions. Seller’s closing costs typically include:

• Loan payoff

• Real estate commission

• Home repairs (if applicable)

• Property taxes

• Title transfer and recording fees

• Closing credits to buyer (if applicable)

• Settlement fees

• Deed preparation

• Courier fees

• Agent administrative fees (if applicable)

• Other closing fees

Have other questions about closing costs or the settlement process? Contact the Linear Title & Escrow team today!

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