Closing Cost Facts
- Closing costs are broken down into two categories: recurring and non recurring. Recurring closing costs are costs that buyers have to pay ongoing. Money for these costs are often negotiated and placed in a fund by the seller of the home so the money is available to homeowners at the end of the year. These costs are necessary and cannot be neglected.
Non-recurring closing costs (often called junk fees) are costs that happen at the time of purchase only. These non-recurring costs can be lowered or gotten rid of altogether. - Recurring closing costs include homeowners insurance, property tax and sometimes mortgage company insurance. Besides standard homeowners insurance, you may be required to have additional insurance, including flood and fire. These are considered closing costs payable before the sale of a home is complete, but they are costs that are paid yearly, as well.
- Non-recurring closing costs are fees for various aspects regarding making the purchase of your home legal. These include title search, notary fees, attorney fees, recording fees and any fees associated with legalizing the home purchase. Escrow fees are also included here.
- The United States' closing cost average in 2010, according to Bankrate.com, is around $3,024. This includes origination fees, paid to set the process of purchase in motion, and title and closing fees. While this may not seem like a lot in the scope of a home purchase, it can be an additional stress for some home buyers to come up with these fees on top of a down payment. The best way to avoid this is to negotiate for the seller to pay closing costs. Many sellers, especially in a buyer's market, are willing to pay these fees.
