What are closing costs?
Closing costs are costs paid at closing or settlement by both a buyer and seller. Fees vary per property, county, settlement company and lender.
What is the difference between a down payment and closing costs?
Both are an assurance to the lender of a buyer’s commitment to this investment. Typically, down payments range from 3.0%-25% of the purchase price. In addition to this payment, a buyer also needs funds to put towards closing costs, which tend to be approximately 3.0-3.5% of the purchase price.
How much are closing costs?
Typically, for a buyer, closing costs are approximately 3.0-3.5% of the purchase price.
Typically, for a seller, closing costs are approximately 7.0% of the sales price.
What do my closing costs include?
Typically, for a buyer, closing costs include, but are not limited to loan costs, recordation and transfer taxes, and settlement fees. Ask your lender for a Good Faith Estimate.
Typically, for a seller, closing costs include, but are not limited to loan costs, recordation and transfer taxes, settlement fees, and brokerage commissions.
Are there any closing cost benefits for being a MD first-time home buyer?
Yes. A first-time MD home buyer does not have to pay the state transfer tax. The buyer is still required to pay the county transfer tax and county recordation tax, unless otherwise negotiated with the seller.
Can closing costs be negotiated?
Yes. Buyers can ask the seller to contribute towards the costs at settlement. This is known as a “closing cost credit” or “seller subsidy.” Restrictions to the amount of this credit are usually dependent on the terms of the mortgage and lender policy. It is the buyer’s responsibility to confirm with their lender that the entire credit can be utilized.