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Q & A: Closing costs

June 2014


I’d like to buy as much home as possible, seeing now is a good time to buy. I was told, however, that the closing costs of a home may prevent me from buying as much home as I want. Is it true?


Closing costs can definitely add up. Typically, closing costs are 2-5% of purchase price of a home. Closing costs include non-recurring and recurring costs. Non-recurring closing costs include such one-time charges as title insurance coverage, escrow, survey, notary, courier, wire or other delivery fees, attorney and appraisal/inspector costs, recording and transfer taxes, buyers broker fee, if applicable and so on. Plus, you may be paying your lenders points on the loan amount. Recurring fees include home, flood, fire insurance, private mortgage insurance, property taxes, prepaid interest etc. If it’s a short-sale, you may incur additional fees like the one charged by the escrow or closing agent, or 3rd party short-sale negotiation company, if one is involved.


1) Oftentimes, many of the fees that make up closing costs are negotiable, and some are completely unnecessary, especially things such as high administrative, mailing or courier costs charged by your lender. Shop around for your mortgage!

2) Also, you can ask for a sellers concession. The concession can be as high as 6% (for FHA). Talk to your real-estate agent for further details and possibilities.