Triangle Area Real Estate News & Information

If you are purchasing a home in Durham, you will need cash to cover your portion of the services it will take to close your mortgage loan. If you are a First Time Home Buyer – you might not know what those costs would be!

Those services and fees will include fees to the lender, the appraiser, the attorney, the court house, inspection fees, taxes insurance – and MORE! There costs are generally broken down into two different “buckets…” One Time Fees (like the Attorney and Appraisal Fees) and Pre-Paid Items (which are generally considered to be part of your on going payment like Insurance and Taxes.

Total Closing Costs For Chapel Hill Homes

The TOTAL closing costs for most Chapel Hill home buyers, purchasing an average home are generally about 3 to 4 percent of the purchase price. Many of the closing costs are associated with the Mortgage Loan Program and Rate (points and origination fees) and the fees that the lender charges to make the loan. These are all disclosed on the buyer’s Good Faith Estimate.

One Time Closing Costs Could Include:

• Buyer Title Policy and Lender Title Policy
• Escrow Fees
• Notary Fees
• Wire fees
• Courier / Delivery Fees
• Attorney fees
• Endorsements
• Recording
• State, County or City Transfer Taxes
• Home Protection Plans
• Natural Hazard Disclosures
• Home Inspection
• Lender fees paid in conjunction with the loan on the HUD-1, line 800.

The Pre-Paid, recurring items at closing might include:

• Fire Insurance Premium
• Flood Insurance (if required in your area)
• Property Taxes
• Private Mortgage Insurance Premiums
• Prepaid Interest
• 2 months of Home Owner Association Dues (if there are any)

The time of the year that you close will dictate how many pro-rated months of premiums the lender will collect to hold against future payments of taxes and insurance. Not every loan has an impound or escrow account, but typically loans totaling more than 80% of your purchase price will require an impound /escrow account.

Can the Home Seller Credit the Buyer for Closing Costs?

We will always check with your lender before we try to negotiate an offer that involves a Seller Credit / Seller paid Closing Costs. Some loan programs limit the amount the seller can contribute – and other programs might have specific fees that the Buyer is required to pay.

• If you are financing 100% of the purchase price, the lender will generally limit your credit to 3% of the purchase price. There are some differences for this, especially if you are purchasing a foreclosed property.
• Depending on your FICO score and the amount of your down payment, the lender might allow a seller to credit you as much as 6% of the purchase price.
• Lenders will not let a borrower to receive cash from a seller at closing – unless your Earnest Money is greater than your portion of the total costs of purchasing a home in Durham, NC.

There’s a specific way the Contract Needs to Be Written when the Seller is paying Closing Costs, and I'm very familiar with this since I do so many buyer side transactions!

Please contact me if you are interested in buying a home in Durham, Chapel Hill or Cary, or have questions about the Home Buying Process in Durham. I am available at 919 659 5173