Typical Home Buyer's Closing Costs in Pittsboro, Chatham County, and the NC Triangle

Usually the purchase price of a home is negotiable, as are other terms and conditions of the real estate purchase contract. Different regions have different customs and practices regarding who pays for what at settlement (closing). However, buyers and sellers are free to negotiate certain fees. In slow-moving real estate markets, the seller may agree to pay points or fees for the buyer. In fast-moving markets, the buyer may have to agree to pay more costs to close the deal. Whatever you negotiate (with the advice and assistance of your real estate buyer's agent) will become the sales contract. Be careful - if some buyer's costs are shifted to the seller, it may increase the price you pay for the property.

It is difficult to provide estimates that will fit every situation; however, one rule of thumb for home buyers is to figure that settlement costs will be about 3% of the purchase price of your home. Some closing costs, such as homeowners insurance, private mortgage insurance, or lender points can be more expensive if your credit rating is low.

When buying a home in Pittsboro, Chatham County or the NC Triangle, here are some associated closing costs that are typically paid for by the buyer:

• Down payment, if any
• Loan application and credit report fee (estimated cost: $75 to $300)
• Loan origination fee, also called underwriting, administrative, or processing fee (estimated cost: $1% to 5% of the loan amount)
• Points, which are a one-time charge imposed by the lender, usually to reduce the interest rate of your loan. One point equals 1% of your loan amount (estimated cost: 0% to 3% of the loan amount)
• Loan broker fee, if you work with a mortgage broker (estimated cost depends on agreement with the broker; can range from no fee to a percentage of the loan amount)
• Appraisal fee (estimated cost: $300 to $700)
• Home inspections - some lenders require home buyers to obtain certain inspections, such as a termite inspection (estimated cost: $75 to $100); other inspections are optional. These can include home, structural, radon gas, septic system, and well inspections, as well as water analysis. As North Carolina is a "Buyer Beware" state, I highly recommend that buyers obtain all inspections appropriate to the property they are buying.
• Prepaid interest - your first mortgage payment is usually due about 6 to 8 weeks after you close; however, interest cost start as soon as you close. The lender will calculate how much interest you owe from the date of closing to the date your first mortgage payment is due (estimated cost depends on the loan amount, interest rate, and the number of days that must be paid for)
• Private Mortgage Insurance (PMI) - if your down payment is less than 20% of the value of the house, the lender will usually require mortgage insurance (estimated cost: 0.5% to 1.5% of the loan amount to pre-pay for the first year)
• Escrow (or reserve) funds, which some lenders require to be set aside in an escrow account to pay for property taxes, homeowners insurance, and flood insurance. With an escrow account, money is held by the lender or the lender's agent, who then pays the taxes and insurance bills when they are due. At closing, you may need to provide some payment into this account, depending on when payments will be due. For example, if you are buying your home in August and property taxes are due the following January, you will need to deposit funds into your escrow account at closing so that you have enough to pay the taxes when the become due in January.
• Survey - many lenders no longer require a survey; however, in most cases it is advisable for a home or property buyer to obtain one (estimated cost varies depending on the property size and accessibility)
• Closing attorney fees, including a title search
• Lender title insurance, which nearly all lenders require, and protects only the lender
• Owner's title insurance, which is generally not required, but protects the homeowner, and is advised
• Homeowners insurance (estimated cost: $300 to $1000, depending on the value of the home and the amount of coverage; you can estimate the cost to be about $3.50 per $1,000 of the purchase price)
• Flood determination fee, which your lender may charge to find out whether the home is in a flood hazard area (estimated cost: $15 to $50). This is not the cost for the flood insurance; flood insurance, if required, would be in addition to your homeowners insurance and may cost from $350 to $2,800 depending on location and property value.
• County deed transfer and filing fees to record the new deed (cost in North Carolina equals $2 per $1,000 of purchase price)
• Pro-rated homeowners association fees, for the period of time between closing and the next due date

Although this information has been prepared to help you make the important decisions involved in buying and financing your home, every home purchase contract is different, and there may be other closing costs associated with your unique situation that are not listed here. Talk with real estate attorneys, mortgage lenders, and your real estate buyer's agent for information about lending practices, mortgage instruments, and your own interests before you commit to a specific loan.

Shop around for the best loan deal. Each direct lender and each mortgage brokerage has their own fee structure. Call around before submitting your final loan application.

Cindy Brudvik Davis, RE/MAX Southern Advantage, a full service real estate agent in Pittsboro, Chatham County, will work on your behalf to actualize your real estate and home ownership goals in the following NC Triangle towns and communities:

Apex (Chatham and Wake Counties)

Carrboro (Orange County)

Cary (Chatham and Wake Counties)

Chapel Hill (Chatham and Orange Counties)

Fearrington Village (Pittsboro in NE Chatham County)

Governor's Club (Chapel Hill, Chatham County)

Graham (Southern Alamance County)

Holly Springs (Wake County)

Morrisville (Wake County)

Pittsboro (Chatham County)

Raleigh and North Raleigh (Wake County)

RTP (Research Triangle Park)

Siler City (Chatham County)

Silk Hope (Pittsboro and Siler City in Chatham County)

Snow Camp (Southern Alamance County)

Southwest Durham County (near Duke University and the Streets at Southpoint)

UNC (Chapel Hill, Orange County)

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