Mortgage Settlement


Closing Costs and Fees to State and Local Governments

Some parts of the country have low transfer and recording fees (one-time fees), but in other areas the costs of transfer and recording fees plus property taxes collected by state and local governments may be as much as 1.25% of the loan amount. Although there is no way to avoid paying these fees and taxes, you may be able to negotiate with the seller to pay some of these costs. But remember, you must include these terms as part of the purchase offer for the property.

Amounts for property taxes may go into an escrow account. The amount you will need depends on when property taxes are due and the timing of the settlement. The lender should be able to give you an approximation of these costs at the time you apply for the mortgage.

"All-in-One" Pricing of Closing Costs and Fees

Some lenders have bundled most of their closing costs into a single price. Generally, they combine the following fees:

  • Application
  • Origination
  • Underwriting and Processing
  • Points
  • Pest Inspection
  • Appraisal
  • Credit Reports
  • Lender's Attorney
  • Flood Certification
  • Title Search and Title Insurance
  • Recording
  • Fees for Other Tax Services

This all-in-one price, however, does not include all of the fees needed at settlement. You will also need funds for the following:

  • Prepaid Interest (based on the day of the month you settle)
  • Mortgage and Transfer Taxes (determined by your state or local taxing agency)
  • Private Mortgage Insurance (if needed)
  • Homeowners (Hazard) Insurance
  • Flood Insurance (if needed)
  • Reserve (or Escrow) Funds for Property Taxes and Homeowners Insurance.
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The information provided in this website is not legal advice and should not be interpreted as legal advice. This website is intended to provide a basic understanding of this information in summary form. This information may not be comprehensive, is subject to change, and may not apply to all individual circumstances. Any information received here should be confirmed with the appropriate government agencies or with an attorney, particularly as it relates to your individual circumstances. Your use of this website indicates your agreement to be bound by our Terms of Use.