"Closing Costs" or "Settlement Costs", are an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property.

What services will I be paying for when I pay closing costs?

You will usually be paying for such things as real estate commissions, appraisal fees, loan fees, escrow charges, advance payments such as property taxes and homeowner's insurance, and title insurance premiums.

How much should I expect to pay in closing costs?

The amount will vary. However, after you submit your loan application, an estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act. This disclosure provides you with a good faith estimate of what your closing costs will be in the real estate process. An itemized list of charges will be prepared by your attorney when you close your transaction and take title to your new property.


Can I pay for my closing costs in installments?

No. Many different parties who have fulfilled their responsibilities will be awaiting payment upon closing. The title or escrow company will disburse money to those parties, pursuant to the escrow instructions, when funds are available.

Will I be allowed to write a personal check to cover my closing cost?

Your closing funds should be in the form of a cashier's check, issued by an institution from the state of your purchase, made payable to the title company or escrow office in the amount requested. A personal check may delay the closing or may be unacceptable to the title or escrow company.

How much can I expect to pay for Title Insurance?

Your title insurance premium may actually amount to less than one percent of the purchase price of your home, and less than ten percent of your total closing costs. Your title policy is good for as long as you and your heirs own the property with the payment of only one premium.

Why are separate owner's and lender's title insurance policies issued?

Title insurance companies insure your rights and interests in order to protect you against claims. Both you and your lender will want the security offered by title insurance.


<>Article by CLTA