Closing Costs when buying a home in New Bern
Information provided by the Tyson Group Realtors. New Bern's Number 1 Real Estate Team
If you are not familiar with what closing costs and fees are typically associated with buying or selling real estate this web page will be helpfully to you.
Most closing cost expenses are paid when signing the final loan documents at closing. Both buyers and sellers will have closing costs. Your lender should give you a good faith estimate so that you can compare closing cost between different lenders.
Ready to learn about closing costs? Lets start with seller closing costs.
When you transfer ownership of real estate you do so by signing an instrument called a deed. A deed is a legal document and can only be drawn up by an attorney. The owner must execute a deed and then after closing the attorney will file it with the Register of Deeds office in the County where the property is located. The typical cost associated with drawing up a deed by an attorney is $200-$225.
Real Estate Transfer Tax
When you sell real estate in North Carolina you must pay the state excise tax. This amount is .002%. Lets say your home sold for $200,000. You multiply the rate(.002%)by the sales price, ($200,000) and get $400. The closing attorney will take this much out of your proceeds at closing and pay it to the State.
If the seller has already paid the property tax for the year, than the seller will be credited at closing for the portion of the taxes that benefit the buyer. In N.C., the property tax bills are usually mailed out in late August or early September. They are due upon recite, but no penalty is applied if they are paid by Jan.5 of the following year. If the seller has not paid the property tax by the closing date the closing attorney will take the amount of the sellers share of taxes out of the seller proceeds at closing and credit them to the buyer.
Any other fees, dues, etc., such as POA dues, will be pro rated by the attorney at closing. For instance, if the POA dues are $400 a year and the seller has already paid the dues for the entire year, the seller will be credited for their unused share of dues.
If you are not attending the closing there might be some sort of overnight fees involved to ensure the deed and or other paperwork are signed and returned to the attorney in time for the closing. These fees usually run around $40-60.
This is paid when you do the loan application. The cost is around $40-$60.
The appraisal will cost around $400-$600 and is usually, but not always, paid in advance before the closing.
Expect to pay about $300-$500 depending on the size of the home for a home inspection. There are other inspections that you might want to consider getting when buying a home. Here are a few you might want to consider. 1.Heating and Air,2.septic tank if applicable,3.well if applicable. Home inspections are generally paid before closing.
Termite-Wood Destroying Insect Report
Most Banks will require you to have a Wood Destroying Insect Report, sometimes referred to as a Termite Report. This will cost around $125 and is sometimes paid before closing.
Most mortgage companies do no require a survey. I always recommend getting one as I have seen a few surprises in my real estate career and Title Insurance does not cover any encroachments that would have been discovered with a survey. Expect to pay around $400-$500 for a survey on a 1/2 acre lot.
Flood Certification Fee
This fee is for determining if your home is in a flood zone. The flood certification fee will cost from $10-$20 and is usually paid at closing.
If your house is in a flood Zone your mortgage company will require you to carry flood insurance. To buy flood insurance you will need to get an elevation certificate done by a registered land surveyor. This certificate will cost around $250-$350, and is sometimes paid outside closing and sometimes paid at closing. For more information on Flood Insurance go to Flood Insurance
Attorney fees run around $700-$850 and are paid for at closing.
Loan Origination Fee
The Loan Origination fee is the fee charged by the bank and is set by the bank. I have seen origination fees run from $700-$2,000. You will need to check with your bank to get this figure.
Here is how interim interest works. Let's say You purchase a house and it closes on the 25th of the March. Your first regular payment wii be on the first of May. Interim interest would be charged from the 20th of March until the end of April. What day of the month you close on will determine the amount of interim interest. Interim iterest is collected at closing.
The title to a piece of property is the evidence that the owner is in lawful possession of that property. Title insurance protects against claims from defects in the title. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy. There are 2 kinds of title insurance. The first is lenders title insurance. Your lender will require you to purchase this on their behalf. The second kind is owners title insurance. This protects your interest and is optional. To calculate the cost of title insurance click the link below.
Your mortgage bank will want to make sure the taxes on your home are paid on time to protect their interest in the property. At closing you will have to pay for your share of the estimated property tax for the remainder of the year in advance and will likely have to pay an additional 12 months worth of the estimated property tax that will be held in escrow and paid for you by the mortgage company the following year when the tax is due. This is paid at closing.
At closing you will be credited if the HOA fees have not been paid by the current owner and if the current owner has already paid for the entire HOA dues for the year you will reimburse him for his unused share.
HOA transfer Fee
Some HOA will charge, around $100 to give your attorney information on the current status of the HOA dues and to transfer the HOA fees from the current owner to the buyer.
At closing you will likely have to pay for one year of your property insurance in advance and will likely have to pay an additional 2-3 months worth of the estimated premium. Then each month your mortgage payment will include 1/12 of the estimated annual insurance premium. This will be held in escrow and when the premium is due the mortgage company will pay it for you.
In Eastern N.C. you will be required to carry a separate wind policy. Usually you will pay for a 1 year premium and then an additional 3 months in premium. This will be held in escrow and premium is due the mortgage company will pay it for you.
Flood Insurance-if you are in a flood zone
At closing you will have to pay for one years worth of your flood insurance and will likely have to pay an additional 3 months worth of the estimated premium. Your mortgage payment will include 1/12 of the annual premium that will be held in escrow so that the bank can renew your flood insurance coverage when it expires. Flood insurance can cost as little as $200 a year or over $1000 a year depending on finish floor elevation and how the home was construction. For more information on Flood Insurance go to Flood Insurance
Your Deed and Mortgage will have to be recorded with the Register of Deeds. This cost usually runs between $55 and $100.
If you are not attending the closing there may be some overnight fees. These usually run around $40-$60.
Dr. John Zannis
The Tyson Group was great to work with. Steve knows the area inside and out and was a great help to us moving from out of town. I highly recommend them. --John Zannis, MD
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