Real Estate Closing and Closing Costs Defined

Home Buying Tools

Closing Costs

When ownership of the property is transferred from a Seller to a Buyer, a meeting takes place with such parties and it is known as the "closing." Title of the property is transferred as soon as the deed from the closing is recorded at the government registry of deeds.

As a buyer of a home, you will be responsible for substantial closing costs. Some costs might include: month-to-date interest on your new mortgage, title search fee, title insurance fee, bank legal fees, bank courier fees, "points" (1% of loan principle equals one point), etc. At the closing you will be required to present a cashier's check for the buyer's closing costs.

Please note that when you apply for a mortgage, an estimate of closing costs will be calculated and given to you. This should help you to prepare financially for the closing. At the closing, you will be presented the final Settlement Statement, that will show actual closing costs for the buyer and seller.

The following Settlement Statement form is quoted from the Federal Housing and Urban Development web site concerning closing costs. Please observe the various fees you may be responsible for at closing as a buyer or "borrower:"

A. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SETTLEMENT STATEMENT
B. TYPE OF LOAN				6. File Number		7. Loan Number
	1. o FHA		2. o FmHA
3. o CONV. UNINS.	4. o VA		5. o CONV. INS.	8. Mortgage Insurance Case Number
C. NOTE: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals.
D. NAME AND ADDRESS OF BORROWER:		E. NAME AND ADDRESS OF SELLER:			F. NAME AND ADDRESS OF LENDER:
G. PROPERTY LOCATION:		H. SETTLEMENT AGENT: NAME, AND ADDRESS
		PLACE OF SETTLEMENT:			I. SETTLEMENT DATE:

J. SUMMARY OF BORROWER’S TRANSACTION			K. SUMMARY OF SELLER’S TRANSACTION
100. GROSS AMOUNT DUE FROM BORROWER:			400. GROSS AMOUNT DUE TO SELLER:
101. Contract sales price			401. Contract sales price
102. Personal property			402. Personal property
103. Settlement charges to borrower(line 1400)			403.
104.			404.
105.			405.
Adjustments for items paid by seller in advance			Adjustments for items paid by seller in advance
106. City/town taxes to			406. City/town taxes to
107. County taxes to			407. County taxes to
108. Assessments to			408. Assessments to
109.			409.
110.			410.
111.			411.
112.			412.
120. GROSS AMOUNT DUE FROM BORROWER			420. GROSS AMOUNT DUE TO SELLER

200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER:			500. REDUCTIONS IN AMOUNT DUE TO SELLER:
201. Deposit of earnest money			501. Excess deposit (see instructions)
202. Principal amount of new loan(s)			502. Settlement charges to seller (line 1400)
203. Existing loan(s) taken subject to			503. Existing loan(s) taken subject to
204.			504. Payoff of first mortgage loan
205.			505. Payoff of second mortgage loan
206.			506.
207.			507.
208.			508.
209.			509.
Adjustments for items unpaid by seller			Adjustments for items unpaid by seller
210. City/town taxes to			510. City/town taxes to
211. County taxes to			511. County taxes to
212. Assessments to			512. Assessments to
213.			513.
214.			514.
215.			515.
216.			516.
217.			517.
218.			518.
219.			519.
220. TOTAL PAID BY/FOR BORROWER			520. TOTAL REDUCTION AMOUNT DUE SELLER

300. CASH AT SETTLEMENT FROM/TO BORROWER			600. CASH AT SETTLEMENT TO/FROM SELLER
301. Gross amount due from borrower (line 120)			601. Gross amount due to seller (line 420)
302. Less amounts paid by/for borrower (line 220)			602. Less reductions in amount due seller (line 520)
303. CASH (_ FROM) (_ TO) BORROWER			603. CASH (o TO) (o FROM) SELLER

L. SETTLEMENT CHARGES
700. TOTAL SALES/BROKER’S COMMISSION based on price $ @ %=	PAID FROM BORROWER’S FUNDS AT SETTLEMENT	PAID FROM SELLER’S FUNDS AT SETTLEMENT
Division of Commission (line 700) as follows:
701. $ to
702. $ to
703. Commission paid at Settlement
704.
800. ITEMS PAYABLE IN CONNECTION WITH LOAN
801. Loan Origination Fee %
802. Loan Discount %
803. Appraisal Fee to
804. Credit Report to
805. Lender’s Inspection Fee
806. Mortgage Insurance Application Fee to
807. Assumption Fee
808.
809.
810.
811.
900. ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE
901. Interest from to @$ /day
902. Mortgage Insurance Premium for months to
903. Hazard Insurance Premium for years to
904. years to
905.
1000. RESERVES DEPOSITED WITH LENDER
1001. Hazard Insurance months @ $ per month
1002. Mortgage insurance months @ $ per month
1003. City property taxes months @ $ per month
1004. County property taxes months @ $ per month
1005. Annual assessments months @ $ per month
1006. months @ $ per month
1007. months @ $ per month
1008. Aggregate Adjustment months @ $ per month
1100. TITLE CHARGES
1101. Settlement or closing fee to
1102. Abstract or title search to
1103. Title examination to
1104. Title insurance binder to
1105. Document preparation to
1106. Notary fees to
1107. Attorney’s fees to
(includes above items numbers; )
1108. Title Insurance to
(includes above items numbers; )
1109. Lender’s coverage $
1110. Owner’s coverage $
1111.
1112.
1113.
1200. GOVERNMENT RECORDING AND TRANSFER CHARGES
1201. Recording fees: Deed $ ; Mortgage $ ; Releases $
1202. City/county tax/stamps: Deed $ ; Mortgage $
1203. State tax/stamps: Deed $ ; Mortgage $
1204.
1205.
1300. ADDITIONAL SETTLEMENT CHARGES
1301. Survey to
1302. Pest inspection to
1303.
1304.
1305.
1400. TOTAL SETTLEMENT CHARGES (enter on lines 103, Section J and 502, Section K)

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