What to Expect with Buyer's Closing Costs

Buying a home can have some challenges, particularly for first time buyers.  One of your biggest hurdles may be coming up with the down payment.  Another substantial cost that some buyers forget about when preparing to buy a home is closing costs.

The more you know about the home buying process and the expenses that you are likely to face, the better for you.  Closing costs are the miscellaneous fees charged by those involved with a home sale, i.e. your lender, the escrow company, the title company, etc.  Closing costs can run anywhere from about 2% up to about 3.5% of the total sale price of the home you are buying.

Closing costs are separated into two categories: non-recurring closing costs and recurring costs. Below are lists of both the non-recurring and the recurring closing costs that you may have to pay in California: 

Non-Recurring Closing Costs

  •   Title insurance
  •   Escrow fees
  •   Notary fees
  •   Wire transfer fees
  •   Courier fees
  •  Items that you will have to pre-pay - such as interest
  •   Home inspection (typically paid at the time of the inspection)
  •   Recording Fees (local fees)
  •   Credit check
  •   Document Preparation
  •   Appraisal Fees (typically paid for prior to the appraisal)
  •   Transfer Fees (county/city)
  •  Fees associated with your loan
    • Loan origination fees
    • Application and/or processing fees

Recurring Closing Costs

  • Property taxes
  • Private mortgage insurance (you won't have this expense if you are paying 20% down or more)
  • Homeowners insurance

This is not a complete list. There may be other closing costs that you will have.  It is dependent upon each individual situation  (what is customary in the area and what you have negotiated with the seller).