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Liberty Bell Agency, Inc.
Mellon Independence Center,
701 Market Street, Suite 6001,
Philadelphia, PA 19106

Phone:
(215) 625-3660
Fax:
(215) 625-3689

9:00 AM to 4:00 PM
Monday through Friday
 
 
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Typical Closing Costs Explained

These are closing costs that are payable to the local, county, or state governmental entities and relating to the transaction. Usually the only fees applicable in Pennsylvania are county recording fees and any transfer taxes owed for documents created in the transaction, such as the deed and mortgage. Closing costs may also include the actual government charges for obtaining tax, utility and other municipal certification statements.

 

 


Additional Settlement Charges: These are miscellaneous charges that may be related to the transaction, such as the cost for a survey, or the cost for a pest inspection. Other items that the seller and buyer agree to have paid out of the settlement may also appear as additional settlement charges.

 


The Real Estate professionals involved in the transaction can provide additional details as to the particular closing costs that will apply the transaction. It is recommended that the parties to the transaction discuss the closing costs with the various professionals, including the real estate agent, the lender or mortgage broker, and the title agent, prior to scheduling the closing date. This could help to avoid any unexpected financial concerns that may cause the actual settlement to be prolonged or otherwise postponed.

 

Closing costs are the expenses relating to the settlement of a real estate sales transaction or mortgage loan. These costs can be summarized into four main categories.

Lender Fees and required prepaid charges: Lender fees are the actual expenses that the lender incurs in the processing of your loan. These fees generally are charged for items such as origination costs, appraisal, underwriting, processing, document preparation and administrative costs. The borrower should always request that the lender or mortgage broker explain all fees prior to attending the closing, as these fees may add significant to the closing.

Unless the seller agrees to pay for any lender fees in the property sales agreement, these fees are always charged to the buyer. Generally, lender fees have been estimated to cost between 2 and 3 percent of the amount being borrowed, however the fees vary widely depending on the type of mortgage loan chosen by the borrower.

If the borrower chooses to pay Loan Discount points, this cost would be disclosed as lender fees as well. Loan Discount points (commonly just called “points”) allows a borrower to buy down the interest rate by prepaying a fixed amount to the lender at closing. When comparing mortgages, it is prudent for the borrower to ask the lender to explain how the payment of points may or may not be cost effective for the particular loan situation of the borrower.

Prepaid charges are for items related to the mortgage that the lender requires to be paid in advance at closing. Typically, prepaid items consist of interest due until the first mortgage payment is due; costs for mortgage insurance and hazard insurance; and initial reserve amounts needed by the lender to establish an escrow account for the payment of future hazard insurance premiums, real estate taxes, and homeowners’ association dues.

After an initial meeting with a mortgage professional, the borrower will receive a Good Faith Estimate (GFE) that shows all of the closing costs associated with the mortgage application. The mortgage application period is the best time to negotiate the loan terms and costs. If a credit report costs $100 for one lender and $20 at another lender, but the second lender's overall offer is better, it is not uncommon for the borrower to point out the discrepancy and ask the preferred lender to lower its charge. Be aware, however, that third party fees charged by the lender are usually negotiated and established between the mortgage lender and third party before a mortgage offer is presented to the borrower.


Title Charges: Pennsylvania is a buyers' choice state and the consumer can choose who will provide them with Title related services. A title company works for the person who pays the policy premium, and the buyer or borrower is not required to use a title company selected by someone else. If the realtor or lender has offered to prepare a title insurance application, the buyer can direct the realtor or lender to place the title order with Liberty Bell Agency.

Title insurance rates are approved by the state of Pennsylvania, and there is no difference in insurance rates between agents. The buyer or borrower will typically want to choose a title company based on their quality of service and their ability to make the closing happen timely.

Title company fees consist of the charges to coordinate the closing and to provide title insurance. In Pennsylvania, title insurance rates are “all-inclusive”, meaning that many of the costs that are incurred by the title agent cannot be separately charged to the buyer or seller in the transaction. Almost all of the costs for closing the transaction and issuing title insurance policies must be paid from the title insurance premium. There are exceptions, such as when a closing is held outside of the title agent’s office, or if the title search and examination require unusual effort. Usually though, there will be no charges for items such as the Settlement or Closing fee; the Abstract or Title Search; the Title Examination; or the Title Insurance Binder. The charge for Title Insurance is based on a rate schedule for the greatest amount of coverage provided on a Lenders or Owners policy.

Liberty Bell Agency has published a schedule of related title charges on this website, and has published the current title insurance rates for use in Pennsylvania. To review this information, click on the appropriate link below:

Pennsylvania Title Insurance Rates
Schedule of Closing Service Charges 

 


Government Fees:

 
   
 

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Working with Liberty Bell was a great experience. I would recommend this company for any real estate closing.

Bob
Realtor
 
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