At Wilson Realty Group, our buyers are prepared for closing by our team of professionals. Part of the preparation we do is helping our buyers understand the common closing costs they will be responsible for at closing. Buyers and sellers are responsible for a variety of fees and expenses that you and the seller will have to be paid at the time of closing. The buyers lender must provide a good-faith estimate of all settlement costs and the closing agent conducting the closing will tell you the required amount for both the buyer and the seller. The most common closing costs for buyers are:
- Down payment
- Loan origination
- Points, or loan discount fees, which buyers pay to receive a lower interest rate
- Home inspection
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowner’s insurance, if being paid as part of the mortgage
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for the buyers.
- Deed recording
- Title insurance policy premiums
- Land survey
- Notary fees
- Prorations for buyers share of costs, such as utility bills and property taxes
As far as prorations as concerned, because such costs are usually paid on either a monthly or yearly basis, buyers might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay buyers back or for buyers to pay the sellers for bills the sellers may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume the buyers purchases the home on the 6th of the month. The buyer would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first five days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.
Whether you are a first time home buyer or you are a savvy investor, Wilson Realty Group takes the time to go over each cost associated with your closing to make sure you understand what is on your closing statement. So call us today at 202-642-5478 and “Let’s move!”