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 ?
Closing costs include several different fees and services.
Here's a guide on ways to save on closing costs on a home mortgage.
BBVA Compass has announced the enhancement of its programs designed to help more people with homeownership, offering additional closing cost assistance for low-to-moderate income (LMI) borrowers who qualify for FHA or VA home loans, the company said.
The parties' agreements do not expressly set out how closing costs should be allocated between the parties upon the sale of the marital asset.
Nationally, average closing costs for a single-family property totaled $5,651 including taxes and $3,438 excluding taxes.
CV Mission Critical acquired a 58,560 square-foot colocation data centre in Arizona for a contract purchase price of USD 15.2m, which excludes closing costs and related fees.
In addition to originating loans utilizing down payment and closing cost assistance grants that help borrowers qualify for mortgage loans, the team also develops partnerships with nonprofit agencies, realtors and other affinity groups to provide homebuyer education and service low- to moderate-income and minority borrowers within the community.
Ranked 36th, Harney County, with an average closing cost of $2,774, or 2.7 percent of median home value of $104,400, has the most expensive closing costs.
San Diego-based ClosingCorp[R] announced the results of a nationwide survey that shows roughly two-thirds of millennials who plan to buy a home are unaware of closing costs.
Inventory levels are rising just slightly and they are seeing some movement/improvement in this sector which is good news, especially for buyers who want/need closing costs.
Currently, closing costs and fees on mortgage loans of more than $100,000 in face value are capped at no more than 3% of the loans' value minus closing costs and fees.
Some mortgage brokerage firms have begun advertising that they offer substantial credits to their customers -- often in the $2,000 to $5,000 range per loan but sometimes more than $10,000 -- that can be used to defray borrowers' closing costs. A survey of 164 member firms of the National Association of Mortgage Brokers found that these companies provided more than $69 million in closing-cost credits to clients last year, and are on track to pay out the same or more this year.