What’s the Real Cost for Closing on Your House? | Peoples Bank

It seems simple enough – your house has sold for the price you wanted and now all you have to do is pocket that sum of money. Not so fast. Home sellers and buyers often forget about closing costs that affect both of them in a real estate transaction. That’s why it’s important for sellers to figure closing costs into their asking price while buyers should reserve some cash for additional expenses at the end of the transaction.

What Are Closing Costs?

Closing costs are exactly that: fees associated with the closing of a real estate transaction. At closing, the title of the property is transferred from the seller to the buyer. These are costs that are incurred by either the buyer or the seller.

How Much Are Closing Costs?

Generally speaking, home buyers will pay from two to five percent of the purchase price in closing fees. Recent surveys show that buyers pay roughly $3,700 in closing fees.

The Range of Costs To Pay at Closing

The fees associated with closing on your house can vary widely depending on where you live and the type of property you buy. They can include:


Home appraisals can run as much as $500 depending on location and home price. This won’t be part of closing fees if you pay for the appraisal at the time of service.

Loan Origination Fee

You may be charged a fee by your lender for creating your loan. Ask your lender what this fee covers.

Title Search Fees

These fees pay for a background check on the title to make sure there aren’t tax liens on the property or unpaid mortgages. This fee is paid to the title company.

Recording Fee

This is paid to a city or county in exchange for recording the documents in the real estate records.

Homeowner’s Insurance

Your homeowner’s insurance premium for the next year may be included in your closing costs.

Survey Fee

This fee covers the cost of verifying property lines.

Loan Discount Points

You will pay a fee at closing if you are paying points to lower your interest rate. This is a one-time fee. While it’s always tempting to lower your interest rate, it might not be worth it in the long run if you plan to refinance in the future or don’t plan on owning your home for very long.

Homeowners Association Dues

If your new neighborhood has homeowners association dues, you’ll be asked to pay for one month’s dues at closing. These dues vary by property and association and cover maintenance fees and operations costs.

Private Mortgage Insurance

PMI is required if your down payment is less than 20%. Private mortgage insurance is often part of your monthly loan payment. Some loans will allow you to pay your PMI upfront as a one-time fee at closing.

Peoples Bank offers free pre-qualification to home buyers as well as a complete mortgage loan service through its Home Loan Center.  The team of Renessa, Lacie and Cody are “People You Know” and provide permanent financing for your new home as well as re-financing for your existing home