Types of Closing Costs Explained

Posted by Lise | Filed under: Buyers

If you are starting to look for a home, you may wonder how much it is going to cost you to get into that new home.  Certainly, there is the down payment,  ranging from 3.5 percent for FHA to 20 percent or more for a conventional loan.  In addition, there are closing costs paid at settlement.  Some of the closing costs are variable, while others are non-variable fees, such as the transfer and recordation taxes.  Both the types and amounts of variable fees and costs will vary greatly from one title company to another, and so you definitely should shop around.  You might ask your Realtor or your lender for some suggestions, whether you are a first time home buyer or an experienced shopper!

Variable fees include:

  • Settlement/closing fee
  • Title search/abstract fee
  • Title insurance premium
  • Title insurance binder fee
  • Location survey fee
  • Courier/overnight fee
  • Notary fee
  • Document preparation fee, etc.

Non-variable costs – These costs include the transfer and recordation taxes charged by the State of Maryland and the respective county along with the costs charged by the county clerk’s office for recording of the deed, deed of trust (mortgage), and other documents which require recordation.

Unless otherwise negotiated in the sales contract, the standard purchase transaction will require that the purchaser(s) and the seller(s) split the total transfer and recordation costs. In a residential refinance transaction that does not include a transfer of ownership, only the state recordation tax will be charged based on the new loan amount less the principal balance of the existing mortgage(s) to be paid off at closing.

If you need some recommendations for a title company, please call the Lise Howe Team. Whether you are settling in Logan Circle, McLean Virginia, or the Kentlands in Montgomery County, we can find you a great title company that provides wonderful service at a reasonable price!

Tags: , , , , , , , ,

Leave a Reply