Closing Costs

Common Closing Costs for North Jersey Buyers

Your lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will most likely have to be a cashier’s check. Your title company or other entity conducting the closing will tell you the required amount for:

  • Your downpayment.
  • A loan origination fees.
  • Points, or loan discount fees you pay to receive a lower interest rate.
  • Appraisal fee.
  • Your credit report.
  • Private mortgage insurance premium.
  • Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
  • Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
  • Deed recording fees.
  • Title insurance policy premiums.
  • Survey.
  • Any inspection fees—building inspection, termites, etc.
  • Notary fees.
  • Prorations for your share of costs such as utility bills and property taxes.
  • Possible extra expenses – In many North Jersey Towns where there are lakes, home owners may need to pay off Dam Assessments, if they have been levied upon your property.

Information About Prorations. Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first 5 days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.

What You Should Keep From Your Closing

  • The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.
  • ATruth in Lending Statement summarizes the terms of your mortgage loan.
  • The mortgage and the note  spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
  • The deed transfers ownership of the property to you.
  • Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
  • Riders are amendments to the sales contract that affect your rights. For example, if you buy a condo, you may have a rider outline the  association’s rules and restrictions.
  • Insurance policies provide a record and proof of your coverage