Understanding Closing Costs

The cost of purchasing a property extends beyond paying merely the negotiated sales price. Many other
fees associated with the purchase are often called closing costs; these are grouped in to “Recurring”
and “Non-Recurring” Closing Costs. Recurring Closing Costs are paid in escrow but will continue on a
pre-determined basis; i.e. property taxes. Non-Recurring Closing Costs are charged one time only at
closing of the escrow. Below are examples of both types of costs defined:


• Fire Insurance Premium

• Flood Insurance Premium (if required)

• Homeowner’s Association Dues

• Private Mortgage Insurance Premiums (PMI)

• Mortgage Interest

• Real Property Taxes

• Home Warranty (optional)


Title and Escrow related costs:

• Title Insurance Premiums

• Recording Fees

• Endorsements to Title Policies

• Sub-Escrow Fee which may be due Title Company

• Re-conveyance Fees

• Documentary Transfer Tax

• City Transfer Tax (if applicable)

• Escrow Fees

• Loan Tie-in Fee

• Notary Fees / Signing

• Courier/Delivery Fees

• Document Preparation Fees

• Electronic Document Processing Fees

• Transfer or Document Fees to a Homeowner’s Association

• SMPF Fee (Survey Monument Preservation Fund)(if required)

• All Inspections such as Termite, Roof, Chimney, etc..

Lender’s costs:

• Appraisal Fee

• Credit Report

• Lender’s Inspection Fee

• Misc. Loan pay-off Fees (if required for existing loan)

• Flood Certification Fee (if required in your area)

• Loan Origination Fee

• Loan Processing

• Document Processing Fees

• Tax Service Fee

• Real Estate Broker Commissions (Sale)

• Fees for Property Disclosures or City Reports (Sale)

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