Estimated Buyer Closing Costs
You might be saving up for a down payment. 3.5%, 5%, 20%... but do you know how much more you will have to bring to the closing table? It is important to understand the additional fees and services involved in purchasing a home in order to allocate enough cash or decide to see if requesting a seller credit is right for you.
Please keep in mind that these are estimated costs and will vary based on the price of the home, the type of mortgage and your location.
These are fees that are charged by your mortgage company in order to process your loan.
Appraisal Fee $400-$600
Credit Report - $50-$400
Tax Service - $100-$200
Rate Lock Fee - $800-$1,000
Application / Origination Fee - $800-$1,000
Escrow 3 Months Property Taxes - (Ex. $5,000/yr Taxes = $1,250)
Escrow 3 Months Home Owners Insurance - (Ex. $1,200/yr Insurance = $300)
Pre-Paid Interest - This would be a perdiem charge based on the day of the month that you close and your interest rate
Attorney Fee - $1,000-$1,500
It is not required in the state of New Jersey to use a real estate attorney, but it is highly reccommended. They will aid in the negotiation of home inspection issues, coordinate the title and closing, and protect your interests during the process. I suggest using a local attorney in the area of which you are buying as there are many local factors and professional protocol that go into a real estate transaction that do not apply in other areas.
Title Search - $1,000-$1,500
There are multiple fees that are associated with a good title search. These can include important state and federal searches, tax searches, tidelands searches as well as notary, delivery, and recording fees that are associated with ensuring you have clear title to the property
Title Insurance - $1,200-$1,500 or (0.5% of the value of the home)
Title insuance is issues to protect you, the homeowner from any encumbrances that might have been overlooked or omitted in the search that was done prior to closing. This price can vary with the purchase price of the home for larger homes.
Home Inspection - $400-$600
A good home inspection is a very important aspect to buying any home, even new construction. This will uncover any hidden defects including flood damge and provide a thorough inspection of any attics, crawl spaces or basements. Being present at the home inspection is important since a good home inspector will go over all of the utilities in the home, how to use them and how to care for them. Even if there are no major issues with the home, you will learn about potential hazards, how to avoid future issues and general tips on proper home ownership.
Survey - $750- $1000
Most banks and/or townships will require a new survey of the property that you are purchasing. This will ensure that no illeagle structures or encumbrances have been put on the property since it was last reviewed. It allows you as the home owner to see where sheds and fences can be added and if any additions or additional sturctures can be built. Some times the fee for this will be adjusted upward if the property is larger or difficult to navigate.
Recording Fees - $150-$300
The title of your home, the deed and your mortgage must be recorded. There are small fees to ensure this is done correctly and in a timely manner.
Utility Proration - $???-$???
Most closing will involve perdiem prorations of the Water/Sewer/Electric and Taxes based on the previous owners payments and the day of the month that you are closing. This will vary from day to day in any transaction.
Elevation Certtificate - $400-600
In the wake of hurricane sandy, flood insurance has been an ever increasing concern in the real estate world. This is the document that your flood insurance company will use to determine your flood rates. This is typically done by the surveyor when they are completing the survey and most likley will be packaged together. Obviously, this only applies to homes in a flood zone. To see if your property is in a flood zone, please click Here
Mansion Tax - 1% of the Purchase Price ( Ex. $1,500,000 Price = $15,000 Tax)
If you are purchasing a home over $1,000,000 in the state of New Jersey you are required to pay what they call a mansion tax. This is paid by the buyer to the state of New Jersey. This does not apply to vacant Land over $1,000,000.
Additional Insurance Payments
Depending on the transaction, some insurance companies will take 3 months-12 months of the premium up front at closing. This can be on top of the 3 month escrow refered to above that your mortgage company will require so double check with your attorney, title or insurance company prior to closing.
Flood Insurance Premium
If you are in a flood zone, you will most likley be asked to pay your yearly premium upfront as this does not get escrowed by the bank.