Closing costs

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Closing costs

All the expenses involved in transferring ownership of real estate.

Closing Costs

Costs associated with the completion of a sale of real estate. Closing costs are not usually included in the sale price of the property. Some examples of closing costs are appraisal fees, deed-recording fees, and applicable taxes. Mortgage loans often include money for closing costs. They are also called settlement costs.

Closing costs.

When you purchase real estate, there are expenses -- known as closing costs -- you pay to finalize the transaction, over and above the cost of the property.

In some cases, the seller may offer to pay certain closing costs to attract buyers or close the sale more quickly. Closing costs vary depending on the area where the property is located and are either prepaid or non-recurring.

Prepaid costs are expenses that recur periodically, including home insurance premiums and real estate taxes.

Non-recurring costs pay for securing a mortgage and transferring the property, and may include a filing fee to record the transfer of ownership, mortgage tax, attorneys' fees, credit check fees, title search and title insurance expenses, home inspection fees, an appraisal fee, and any points, or up-front interest charges, you have agreed to pay the lender.

The lender will give you a good faith estimate (GFE) of your closing costs before the closing date, so you'll know approximately how much money you need to have available at closing -- usually 5% to 10% of your mortgage.

Many closing costs are tax deductible, so it's a good idea to consult with your tax adviser.

closing costs

Technically, only those fees and expenses necessary to close a sale or a mortgage, such as document preparation, the fee for the actual closing itself, and perhaps overnight delivery charges.In common language,though,the phrase has come to mean all expenses associated with a closing with the exception of the actual purchase price of the property and any lender fees.Rather than specifying that a buyer and seller will share closing costs equally,the better practice would be to spell out all anticipated expenses and the allocation for payment.

Examples of potential expenses include

• Preparation of closing documents
• Deed preparation
• Expenses associated with clearing title defects, such as preparation of affidavits or quit- claim deeds
• Title inspection
• Owners' title insurance
• Lender's title insurance
• Lender-required policy endorsements
• Deed recordation fees
• Mortgage recordation fees
• Transfer taxes (which can be sizable in the case of the New York mansion tax, for example)
• Closing agent fees
• Transfer fees imposed by condos, homeowners associations, or co-op boards
• Listing agent's commission
• Selling agent's commission
• Cost of wood infestation report and clearance letter
• Cost of survey
• Cost of appraisal
• Cost of required inspections
• Escrow fees
• Prepayment penalties
• Prorated real estate taxes, insurance, and/or dues

Closing Costs

Costs that the borrower must pay at the time of closing,in addition to the down payment.

See Settlement Costs.

References in periodicals archive ?
The settlement costs are "not acceptable," Stewart said.
It is a unique Nash equilibrium, since neither bank wishes to switch to morning if the other bank keeps playing afternoon because a switch would increase its settlement cost.
Creditors should be given a choice between guaranteeing settlement costs and providing a good faith estimate that is accurate within a specified tolerance.
For starters, get A Consumer's Guide to Mortgage Lock-ins, A Consumer's Guide to Mortgage Settlement Costs and A Consumer's Guide to Mortgage Refinancings.
Shift the burden of settlement costs to immigrants from taxpayers;
As vaccine makers were getting pulverized by settlement costs, Congress intervened in 1986 and established the Vaccine Injury Compensation Fund, a no-fault compensation scheme.
Connor, recent judgments, such as the $338 million judgment against Price Waterhouse for a disputed audit and the $150 million in settlement costs paid by two law firms and two accounting firms in the Lincoln Savings & Loan failure, ultimately will be passed through the economy.
We prepare and provide the HUD-1 settlement statement, which provide all parties to the transaction with their final settlement costs.
A group of 11 global banks that have been accused in the case will have pay close to USD14bn in regulatory and legal settlement costs by 2014.
AA Insurance director Simon Douglas said: "Insurers have been struggling to overcome exhausted reserves while coping with sharp rises in settlement costs and the frequency of personal injury claims.
43 for the thirteen weeks ended October 29, 2006, which included the impact of employment contract settlement costs.
Comment letters should refer to the Docket Number FR-4727-P-01 and should have the title, "Real Estate Settlement Procedures Act (RESPA); Simplifying and Improving the Process of Obtaining Mortgages to Reduce Settlement Costs to Consumers.