re: Realtor Question - Closing Costs

While the total fee amount can change throughout the loan process, you can expect to pay 2% – 5% of your home’s purchase price in closing costs, according to SmartAsset.com.


Average closing costs generally range from $2,500 – $5,000.

Below you’ll find possible closing cost items involved in an average loan transaction:

Appraisal
The appraisal is required to determine the fair market value of the home. A property appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. Therefore, an appraiser is needed to make this determination.

Credit Report
When you apply for a mortgage, you have to prove that you are capable of paying it back. Lenders will obtain a copy of your credit report to review your borrowing history and ultimately determine if they should risk lending you money. This fee goes to the credit reporting agencies like Experian, TransUnion or Equifax. While a credit report will cost you around $15 – $30, some lenders receive a discounted rate with credit report agencies and will cover this cost themselves.

Closing Fee
This fee is paid to the title company or attorney for conducting the closing.

Title Company Title Search or Exam Fee
This fee is paid to the title company for doing a detailed search of the property records for your home. The title company will look at prior deeds, court records, property and name indexes, and many other documents. This is to ensure that there are no liens or problems associated with your ownership of the property.

Survey Fee
A survey of the property may be required to verify boundary lines for your property and to ensure that there is no encroachment on the lot.

Flood Determination/Life of Loan Coverage
This cost goes to determining whether your property is located in a federally designated flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance.

Courier Fee
Not all lenders charge this fee, but if you do see this listed, it covers the cost of transporting documents to complete the loan transaction as quickly as possible to avoid paying additional interest on your mortgage loan.

Title Insurance (Lender’s Policy)
This covers the costs of assuring the lender that you own the home and the lender’s mortgage is a valid lien.

Title Insurance (Owner’s Policy)
This is an insurance policy protecting you in the event someone challenges your ownership of the home.

Homeowners Insurance
Homeowners insurance is required to cover possible damages to your home. In the event of a fire or other damage, homeowners will receive this insurance to cover the costs of rebuilding. Your first year’s insurance is often paid at closing.

Buyer’s Attorney Fee (Not required in all states)
This fee is paid to the attorney who prepares and reviews all of the closing documents on your behalf.

Lender’s Attorney Fee (Not required in all states)
This fee is paid to the lender’s attorney for preparing and reviewing all of the closing documents on behalf of the lender.

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