Buyer Guide: What Are Closing Costs?

Dated: 01/22/2020

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                      WHAT ARE CLOSING COSTS?

The down payment amount is the difference between the purchase 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: Purchasing price is $500,000. Initial deposit of 3%  is $15,000. Mortgage loan is $400,000. Remaining down payment will be $85,000.

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 my be required to reimburse the seller.

Increased Adjustment

The increased adjustment is the amount of interest acquired between the closing day and the date of the first mortgage payment.

Legal fees/Disbursements

Legal fees include coordination a title search on the property, putting initial insurance in place, transferring title of the home in the buyers name, and facilitating financing disbursement  at closing.

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