What is a Closing Attorney and Closing Fees?

In this article

1. What Closing Fees Can You Expect from a Closing Attorney?
2. Home Expenses
3. List of Closing Fees

What Closing Fees Can You Expect from a Closing Attorney?

 
The closing fees will first be addressed in the Good Faith Estimate provided by your mortgage broker once you are pre-approved. Closing costs, such as legal fees, and other one-time expenses can really add up with your home purchase. Closing attorney fees can range from 2% – 4% of the purchase.

Just keep in mind that you have to have extra cash on hand to cover these costs or have your realtor negotiate with the seller to pay all or a portion of your closing costs. Check with your mortgage broker to make sure you have no surprises at closing by knowing what your closing costs will be upfront.

Home Expenses

Here is a list of what your regular expenses for owning a home might be:

Housing Costs

• Mortgage payments
• Property taxes
• Homeowners Insurance
• Home Association Fees

Utilities

• Heating (Oil, Propane, Natural Gas)
• Electricity
• Water
• Television
• Internet

Home Maintenance

• Lawn equipment
• Lawn care maintenance
• Repairs and home improvement
• Pest control
• Emergency fund

Day-to-Day Living Expenses

• Groceries
• Entertainment
• Credit card payments
• Loan repayments
• Medical expenses (or insurance)
• Childcare
• Pet expenses
• Clothing
• Charity
• Gifts

List of Closing Fees

If you are purchasing a home as a first time home buyer you need to set aside an extra 2% – 4% other than your down payment to cover the cost of your closing fees. If it is a refinance your closing costs can be financed into the new loan amount.

Here’s a brief breakdown of the most common closing costs you can expect to see with a rough estimate of the fee for each. Please check with your mortgage advisor for the exact amounts of your closing fees.

Appraisal (up to $450) – This amount is paid to the appraisal company to assess the fair market value of the home. The lender will send an appraiser to due a property appraisal to insure the value of the home does not exceed the loan approval amount.

Credit Report (up to $30) – A FICO based credit report is pulled to get your credit history and score. The mortgage broker will pull this report on your behalf. This fee will go to the credit company.

Escrow Fee or Closing fee (This is usually $2.00 per thousand of your purchase price plus $250) – This is paid directly to the title company or attorney for conducting the closing transaction. The title company oversees the closing as an independent party in your home purchase.

Title Company Title Search – This fee covers the cost of doing a detailed title search on the property through the property’s records to insure there are no outstanding claims or liens against the property.

Survey Fee (up to $400) – If you don’t have an up to date survey of the property you will have to provide a new property survey to the lender.The survey company will verify all property lines and things like shared fences on the property.

Flood Determination (up to $20) – This fee is paid to determine if your property falls within a flood plain. If so, you will have to pay for flood insurance to be accepted for the loan.

Courier Fee (up to $30) – In some cases you will have to pay a small fee to cover the cost of transporting your loan documentation. It’s at the discretion of the Mortgage broker or lender.

Lender’s Policy Title Insurance ($175 – $875) – This insurance to assures the lender that you own the home and the lender’s mortgage is a valid lien. Similar to the title search, but sometimes a separate line item. Specific rate tables apply here. Check with your Title insurer or have your Mortgage broker confirm this fee on your behalf.

Owner’s Policy Title Insurance ($175 – $875) – This insurance policy protects you in the event someone challenges your ownership of the home. There are a lot of scams out there so its really good idea to protect your investment.

Homeowner’s Insurance ($300 and up) – This covers the possibility of damages to your home. Your first year’s insurance is often paid at closing. The bank may insist on this to protect your interests and the interests of the banks.

Buyer’s Attorney Fee ($400 and up) – Depends on each State. This fee is paid to a Lawyer specializing in Real Estate Transactions who prepares and reviews all the closing documentation on behalf of the lender.

Lender’s Attorney Fee ($150 – $500) – Depends on each State.

Escrow Deposit for Property Taxes & Mortgage Insurance – In a lot of cases you may be required by the lender to put a deposit in escrow to cover the first two months of property taxes and mortgage insurance. This depends on each bank’s lending practices and you may find lenders willing to include the mortgage insurance and property taxes as part of your overall mortgage payment.
Estimated cost: 2 months of each amount

Transfer Taxes This is the tax paid when the title passes from seller to buyer.It really depends which State you are in and if it applies.
Estimated cost: Check with your local county and mortgage broker.

Recording Fees – A fee charged by your local recording office, usually county, for the recording of public land records.
Estimated cost: Check with your local county and mortgage broker.

Processing Fee The lender fee to process the information on your loan application.
Estimated cost: Less than $1000.

Underwriting Fee (up to $895) – The lender fee, covering the cost of researching whether or not to approve you for the loan.
Estimated cost: Less than $895

Loan Discount Points (often zero to two percent of loan amount) – “Points” are prepaid interest. One point is one percent of your loan amount. This is a lump sum payment that lowers your monthly payment for the life of your loan.
Estimated cost : Check with your mortgage broker

Pre-Paid Interest – This is money you pay at closing in order to get the interest paid up through the first of the month.
Estimated cost: Check with your mortgage broker because it depends on your loan amount.

Property Tax – Usually 6 months of county property tax.
Estimated cost: Check with your mortgage broker because it depends on county tax rate

Home Owners Association Transfer Fees (condos only) – The Seller will pay for this transfer which will show that the dues are paid current, what the dues are, a copy of the association financial statements, minutes and notices. The buyer should review these documents to determine if the Association has enough reserves in place to avert future special assessments, check to see if there are special assessments, legal action, or any other items that might be of concern. Also included will be Association by-laws, rules and regulations and CC & Rs.