Typical Buyer Expenses

You’ll likely be responsible for a variety of fees and expenses that you and the seller will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs. The title company or other entity conducting the closing will tell you the required amount for:

  • Down payment
  • Loan origination
  • Points, or loan discount fees, which you pay to receive a lower interest rate
  • Home inspection
  • Appraisal
  • Credit report
  • Private mortgage insurance premium (if loan is more than 80% loan to value)
  • Insurance escrow for homeowners insurance, if being paid as part of the mortgage
  • Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you. 
  • Deed recording
  • Recording fees: $6.00 first page, $4.50 each additional page
  • Documentary stamps on the note: $.35 per $100.00of note amount
  • Intangible tax on the mortgage $.20 per $100.00 of mortgage amount
  • Survey
  • BAC (Brokers Administrative Commission, $250.00)
  • Title insurance policy premiums
  • Land survey
  • Notary fees
  • Attorney fees
  • Prorations for your share of costs, such as utility bills and property taxes 

A Note About Prorations: Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th
of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first five days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.