Living in Colorado
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Estimated Closing Costs
Estimated List of Possible Closing Costs/Escrow Deposits – When Purchasing a Home.
- Appraisal Fee: Approximately $425 - $550, depending on the type of mortgage, primary residence, investment property, condo, etc. This fee is included in your closing costs.
- Assuming an Existing Loan: Buyer would pay any interest due at closing, for the remainder of the month, based on the daily interest charges. There are specifications to verify the loan is assumable….case by case specific.
- Closing Fee: Charges from the title company for closing the loan package for the lender. Generally paid by the buyer and due at closing…. $365 - $450.
- Condo Escrow Fee: Two months’ Homeowners’ Association dues and monthly maintenance fees are paid in advance to maintain the reserves at a reasonable balance in case of needed repairs. Charged to buyer at closing. Amount will depend on the specific HOA dues for the specific property.
- Credit Report: A TRI-MERGE credit report on the buyers’ credit to determine the ability to repay the loan. This is ordered by the lender and is either paid upfront or at the time of close (this will depend on the lender). Generally costs $35 to $55. (If credit supplements are required, the costs can increase, case by case).
- Discount Fee or Points: Negotiated item between Buyer and Lender, used to “buy down” the par interest rate to a lower rate. The rate and cost will depend on the market rates and pricing available, the loan amount, the borrower’s credit score, the loan amount vs. value, etc.
- Down Payment: This will completely depend on the type of loan and the specifics of the borrower’s qualifications. This always needs to be discussed with a qualified mortgage lender.
- Earnest Money: A pledge of interest in the property and “good faith” to continue with the terms of the contract. Earnest money will apply to the buyer’s down payment and is generally 2% to 10% of the purchase price.
- Funding Fee: Applies to VA loans, and the amount will vary from 0% - 3.3%, depending on how many times borrower has used VA eligibility, military disability, etc. Contact your qualified mortgage lender for details. Funding fee, if applicable, will be added to the VA loan amount and therefore financed into the monthly payments.
- Hazard Insurance: The first year policy premium is due at closing (paid to the insurance company of the buyers’ choosing). Contact your insurance agent for rates specific to your new home.
- Hazard Insurance Escrow: Two months’ of hazard insurance will be placed into an escrow account with the lender at closing. 1/12th of the annual policy premium is paid with each monthly payment into the account. The lender pays this premium when the policy comes due annually.
- Inspection Fee: Buyer hires an independent Home Inspection Service. Price generally $275- $450 depending on square footage, construction, condition of home, location of home, specific testing required, etc. Buyer pays Inspection Company at time of inspection.
- Interest Proration: A daily charge on the interest portion of the monthly mortgage payment based on the number of days of ownership by the buyer during the month of close. IE…if buyer closes on the last day of the month, they pay 1 day of prepaid interest.
- Loan Origination Fee: Fee charged by the lender for making the loan available and the work involved in processing, approving, and funding the loan. Will depend on lender and loan amount and will be disclosed on Good Faith Estimate, generally 0% to 1% of loan amount.
- Lenders Title Policy: A Lenders policy is title insurance policy insuring the mortgagee (being the lender in the mortgage document), against loss caused by invalidity or unenforceability of the mortgage lien, which may occur as a result of defective title, or against loss of priority of the mortgage. Also called a "Mortgagee Policy" or “Loan Policy”, most primary mortgage lenders will require a Loan Policy when they make a loan. The amount of insurance for the Loan Policy is based on the dollar amount of the loan and can range from $300-$600 (again depends upon the loan amount and the title company).
- Recording Fees: $6 for the first page and $5/per page thereafter, collected at closing. Deed for transferring ownership is usually one page. Deed of Trust for a fixed rate loan is usually 4-15 pages. Deed of Trust for an adjustable rate loan is usually 6 to 20 pages.
- Rents: Prorated based on the date of sale vs. date of buyers’ possession, agreed upon by buyer and seller, and due at closing.
- Special Taxes: Any special assessment charges attached to the property. Generally prorated to closing and due at closing.
- Improvement Location Certificate (Survey): $175 - $450 if required on the title commitment. Pricing depends on type of home and survey requested.
- Taxes Reserved (Escrowed): Two months’ of property taxes placed into an escrow account with the lender at closing. 1/12th of the annual policy premium is paid with each monthly payment into the account. The lender pays this premium when the taxes come due annually.
- Title Insurance Fee (Owners’): The owner's policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those listed as exceptions in the policy or are excluded from the scope of the policy's coverage, and in the state of Colorado is generally paid for by the Seller. Costs can range from $700-$2700 depending upon the sale price of the home.
- **** Always consult a qualified mortgage lender and obtain an accurate Good Faith Estimate of closing costs when considering a mortgage loan****