What are "closing costs," and how much should I expect to pay?

Depending on your area, the price of your home, your lender's terms, and other factors, your closing costs will vary. An agent can provide a rule-of-thumb figure for your situation. Also, your lender will give you a pre-settlement "good faith" estimate of specific costs. This estimate is sometimes low. Take extra funds just in case.

Closing costs typically include:

• Loan origination fee, usually 1% of your mortgage amount.
• Discount point (or points); each point is 1% of your mortgage amount.
• Assumption fee if you assume the seller's loan.
• Cost of a title search.
• Lender's title insurance fee.
• Owner's title insurance fee (optional, but advisable).
• Survey fee ( if applicable).
• Transfer tax (state and/or local tax and tax stamps in some areas; sometimes split with seller)
• Lender's appraisal fee.
• Recording fees for settlement documents.
• Prepaid interest on your mortgage, covering the time between settlement and your first monthly payment.
• Prepaid mortgage insurance premium.
• Homeowner's hazard insurance premium.
• Property tax escrows.
• Lawyer's or escrow company's fee.

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