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Understanding Closing Costs

(2 - 5% of Purchase Price)

Down-payment
The down-payment amount is the difference between the selling price of the property and the amount of money borrowed to purchase the property. The deposit provided with the offer is deducted from the down-payment. Example: Selling price is $300,000. Deposit with offer is $10,000. Mortgage loan is for $270,000. Remaining down- payment will be $20,000.


Prepaid Utilities
The buyer is responsible for paying utilities as of the closing date and may also need to reimburse the seller for prepaid utilities.


Prepaid Property Taxes
Property taxes are calculated based on the value of the property. If the seller has prepaid property taxes, the buyer may be required to reimburse the seller.


Interest Adjustment
The interest adjustment is the amount of interest accrued between the closing day and the date of the first mortgage payment.


Legal Fees/Disbursements
Legal fees include conducting a title search on the property, putting title insurance in place, registering the home in the buyer’s name, and facilitating financial disbursements upon closing.


Transfer Taxes (Land, Estate, etc)

Down Payment

Prepaid Utilities

Prepaid Property Taxes

Interest Adjustment

Legal Fees/Disbursements

Transfer Taxes (Land, Estate, etc)