Closing Costs

There are certain ordinary fees linked to closing the sale of a house. These expenses are commonly divided between the buyer and seller, as noted in the sales contract. Many are universal, but there are nuances to each, so you'll want a real estate expert in California to help lead you through the transaction.

Closing costs that are loan-related 


  • Loan Origination Fee
    This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

  • Points (optional)
    An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

  • Appraisal Fee
    The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

  • Credit Report
    The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

  • Interest Payment
    Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

  • Escrow Account
    At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

Taxes commonly paid at closing 


  • Property Taxes
    This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the seller occupied the property.

  • Transfer Taxes and Recording Fees
    This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

Insurance fees due at closing   

  • Homeowners Insurance
  • Flood or Quake Insurance (optional)
  • Private Mortgage Insurance (PMI) (optional)
  • Title Insurance
Sellers: As we negotiate your sale, I'll not only work to get the highest sales price, but I'll also campaign for limited closing costs. Buyers: When buying a home in Los Angeles County, you will receive a "Good Faith Estimate" (GFE) of closing costs within three days of submitting your loan application. The estimate is based on the loan officer's prior experience and is required to be within an acceptable range so you're not shocked when you arrive at the closing table.