Closing costs

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Closing costs

All the expenses involved in transferring ownership of real estate.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.

Closing Costs

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

See Settlement Costs.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The blizzard of checkboxes and grids of settlement costs on the old forms have been replaced by succinct reader-friendly sections that convey only the relevant information.
A specific definition for stranded contract cost has been provided under the law, and it does not infer covering settlement costs of losing cases of PSALM or any other costs eventually disguised as "liabilities".
While Lane County government's settlement costs have piled up, local counterparts reported few or no such problems.
The outcome is efficient in that it ensures the lowest possible aggregate settlement cost across all pairs of strategies.
"An audit commission report By Mutual Agreement published in 2010 included a survey of settlements for chief executives which showed an average settlement cost of PS309,167 for single tier and county councils - our settlement with Mr Rowland at PS215,331 was significantly lower than this average.
The index is also known to affect settlement costs with higher index values denoting a reduction in the settlement cost environment.
The Index is known to affect settlement costs with higher index values denoting a reduction in the settlement cost environment.
The loss adjustment is calculated by comparing the total contract price with the estimated cost at completion (that is, total cost incurred before the termination, plus the estimated costs to complete the contract if the termination had not occurred): The allowable termination settlement cost then is computed by multiplying the loss adjustment factor by the allowable costs incurred by the contractor excluding settlement costs:
The Dietrich Pension Risk Transfer Index provides a monthly directional data-point regarding the market conditions that affect settlement costs. Higher index values indicate a reduction in the settlement cost environment.
Major features of the proposal involve what the agency calls "significant" improvements in the Good Faith Estimate settlement cost disclosure and removal of regulatory barriers to facilitate the use of Guaranteed Mortgage Packages that help borrowers find mortgages at the most competitive price.
It is estimated the settlement cost him pounds 50million.