Closing costs in real estate are the various fees and expenses you’ll need to pay to finalize a property purchase. Think of them as the final hurdle before the home is officially yours. 

These costs typically include things like legal fees, property taxes, land transfer taxes, home inspections, and lender fees. It’s always a good idea to budget for these costs upfront to avoid surprises. If you’re unsure, your real estate agent or mortgage broker can help you break it down!

What fee types do closing costs include?

1. Loan Origination Fee: Covers the lender’s administrative costs for processing your mortgage. Typically, it’s a percentage of your loan amount.
2. Appraisal Fee: Pays for a professional assessment of the property’s value to ensure it aligns with the loan amount requested.
3. Home Inspection Fee: Covers a detailed inspection to uncover potential issues in the property, ensuring it’s safe and worth the investment.
4. Title Search and Insurance: Ensures the property title is clear of liens or disputes and protects against future title-related issues.
5. Title Search and Insurance: Ensures the property title is clear of liens or disputes and protects against future title-related issues.
6. Legal/Attorney Fees: Covers the cost of preparing and reviewing legal documents related to the property purchase or sale.
7. Escrow Fees: Paid to the escrow company or attorney for handling funds and ensuring all terms of the sale are met.
8. Recording Fees: Charges for recording the property’s title transfer and legal documents with the local government office.
9. Private Mortgage Insurance: Applies if your down payment is less than 20%. Protects the lender in case of buyer default
10. Transfer Taxes: Paid to local or state governments when the property title officially changes hands from the seller to the buyer.