Factor in Closing Costs as Part of Total Cash to Close

Most buyers, especially first-time homebuyers, often forget to consider closing costs when purchasing a home. The usual costs that are thought about are down payment and mortgage payment and closing costs need to be taken into consideration as well as this will impact the total amount of cash you need to bring to the table in order to close escrow.

How Much Are Closing Costs?

Closing costs typically run 2-5% of the total purchase price with the higher percentage near the $200,000 purchase price and lower percent near $1 million. Closing costs can be broken down into non-recurring and recurring.

Recurring vs Non-Recurring Closing Costs

Non-recurring closing costs are the one-time expense you incur when securing a mortgage. These include: lender origination fee, appraisal fee, title fee, notary fee, document prep fee, etc. In other words, these are all the one-time transaction fees in order to secure your mortgage.

Recurring closing costs or costs that you will continue to incur on your home purchase include: insurance, interest, taxes, and homeowner association or HOA dues if applicable.

Who Pays for What?

Refer to our closing section for more detail on closing costs and who pays for what.