Closing Costs
Also known as: Settlement Costs, Transaction Costs
Fees and expenses paid at closing on top of the home's purchase price. Typically 2-5% of the purchase price, including title insurance, loan fees, taxes, and insurance.
Detailed Explanation
Closing costs cover the various services required to complete the real estate transaction: title insurance, appraisal, loan origination, recording fees, and property taxes.
In new construction, closing costs may include additional builder-specific items like utility connection fees, impact fees, HOA transfer fees, and builder administrative charges.
Many builders offer closing cost credits as incentives, especially when you use their preferred lender. These credits reduce your out-of-pocket costs at closing.
In Your Contract
Closing costs are not typically detailed in the purchase agreement itself. You will receive a Loan Estimate from your lender and a Closing Disclosure before closing that itemize all costs.
Key Points
- 1Typically 2-5% of the purchase price.
- 2Include title insurance, loan fees, taxes, insurance, and recording fees.
- 3New construction may add builder-specific fees.
- 4Builder closing cost credits can reduce your out-of-pocket costs.
- 5Review your Loan Estimate and Closing Disclosure carefully.
Related Content
Have a new construction contract? Scan it for $49 at fineprint.homes
Scan Your Contract