What You Should Know About Closing Costs

“Closing” your home refers to a time period during a purchase transaction, where the contract is executed and the conveyance of title is given to the buyer from the seller.  For the buyer, this is a great point in time during the transaction, especially since it indicates that he or she is in the final stages of purchasing a property.  Please continue reading below…

Closing costs are costs associated with a purchase transaction and are paid at closing.  These costs can be paid by either the buyer or the seller, and are in addition to the sales price of the home.  Half of the time, closing costs are paid by the consumer (a.k.a the Buyer), while the other half of the time, they’re paid by the seller; in which case you will get whats called a Seller’s Contribution and the seller will pay 100% of the fees.

Before finalizing the purchase, a borrower can expect to receive an itemized list of services and fees being charged.  The two documents are known as the HUD-1 Settlement Form and the Fee Sheet.  Some of the more common fees include:
  • Real Estate Broker Fees
  • Recording/Government Filing Fees
  • Lender Fees
  • Appraisal Fee
  • Escrows/Impounds/Reserves
  • Title and Closing Charges

The two fees that vary the most are Title and Escrow.  The title company is going to give you what is called a Fee Sheet, and the Fee Sheet depends on the loan amount and the sales price.  The higher the sales price is, the higher the loan amount will be, and the higher the cost the borrower will ultimately incur.  You should expect your mortgage advisor to go line item per line item, and itemize each one of the costs so you understand clearly what each fee is being paid for and the amount that it’s for.

If we were to break down closing costs into two categories, we would find that there are Recurring and Non-recurring closing costs.  Recurring closing costs are costs that recur throughout the life of the loan.  These include property taxes, insurance, mortgage insurance.  On the other hand, Non-recurring closing costs are costs associated with a purchase transaction that only occur at the sale.  Examples include third party fees such as title, escrow, and lender costs (processing and underwriting).

For a cookie cutter deal – lets say a conventional loan at $400,000 – you can safely expect to pay anywhere between 2-2.5% of the sales price in total closing cost fees.  This includes all third party fees and lender fees.

One thing that you should remember when you’re getting a quote for closing costs, is that there are recurring costs that most mortgage advisors will not include in their quote.  These include your property taxes, insurance, mortgage insurance and prorated interest.  Every loan has closing costs, so if there are any other questions feel free to contact me or any of our other mortgage advisors and we’ll be more than happy to help you.


Carmel Valley San Diego Community | Samuel Scott Financial Group | Christian AlvarezChristian Alvarez is a bilingual Mortgage Advisor at Samuel Scott Financial Group with more than 11 years of experience in the mortgage industry. Christian, who was born and raised in San Diego, began his career as a Loan Officer at Primary Capital in Laguna Hills in 2001.  He went on to work for Back Bay Funding, First Capital Corp., and later co-founded Finance North America.  At Finance North America, Christian was one of the first to create and offer US based loans for purchasing real estate in Mexico.

Christian is recognized for his persistence, a particularly valuable quality in a challenging housing market, and his reliability in serving clients.  He considers it a personal goal to help clients in tough situations, especially if they have been denied a loan before.  With his strong commitment to helping people achieve home ownership, Christian is an excellent Mortgage Advisor and a Southern California market expert.

Samuel Scott Financial Group is a boutique mortgage company recognized for superior customer satisfaction and the way they tailor the residential loan process to every individual client.  Todd “Samuel” Pianin and Brian “Scott” Reynolds founded the company on the principles of long lasting relationships, and a sincere honest approach to every single individual we serve.  Consistent and reliable, Samuel Scott Financial Group has been selected as The

Carmel Valley San Diego Community | Samuel Scott Financial GroupBest Mortgage Company in San Diego for the 5th straight year by readers of local publications.

President:  Todd Pianin

Vice President of Sales:  Russ Schreier

Mortgage Advisors:  Christian Alvarez,  Dean Brown, Mark Buchanan, Mitch Palmer, Brian Reynolds, Debra Roberts, Mark Robertson, Alex Scoma, Brian Shaw, Keith Sims, David Talbott.

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Samuel Scott Financial Group is licensed by the CA Dept. of Real Estate license #01458652 and NMLS identifier 235584. ©2011 Samuel Scott Financial Group. All rights reserved.


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