Author: Pam Mason

It’s the Big Day – the day you go to the attorney’s office, sign your name on the dotted line, hand over a cashier’s check and prepare to take ownership of your new home! It’s also the day that you and the seller will pay “closing” or settlement costs, an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property. It’s too often a day filled with uncertainty and stress.

To help you understand this confusing subject, the Land Title Association has answered some of the questions most commonly asked about closing costs.

What services will I be paying for when I pay closing costs?

You will usually be paying for such things as real estate commissions, appraisal fees, loan fees, escrow charges, advance payments such as property taxes and homeowner?s insurance, title insurance premiums, pest inspections and the like.

How much should I expect to pay in closing costs?

The amount you pay for closing costs will vary; however, when buying your home and obtaining a new loan, an estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act after you submit your loan application. This disclosure provides you with a good faith estimate of what your closing costs will be in the real estate process. An itemized list of charges will be prepared when you close your transaction and take title to your new property.

Can I pay for my closing costs in installments?

No, and it’s easy to understand why. Many different parties will have fulfilled their responsibilities and be awaiting payment upon closing. The attorney will disburse money to those parties, pursuant to the escrow instructions, when funds are available.

Will I be allowed to write a personal check to cover my closing costs?

Your closing funds should be in the form of a cashier’s check, issued by an institution from the state of your purchase, made payable to the attorney in the amount requested. A personal check may delay the closing or may be unacceptable to the attorney. An out-of-state check could also cause a delay in your closing due to possible delays in clearing the check.