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2019-02-22 13:34:01
How Much Are My Closing Costs When Buying a Home in Montgomery County MD?

 

How Much Are My Closing Costs When Buying a Home in Montgomery County MD?

 

One of the major expenses from your pocket when buying a home are the down payment and closing costs.  After you have worked very hard to save enough money for a down payment, now you are for the shocking news, no one really likes to talk about this at the beginning ...because they assume that you already know..

Closing Costs 

The closing costs expenses can be several thousands of dollars in addition to your down payment;

What exactly are closing costs?

When buying a home in Maryland, you will be required to pay closing costs in addition to the price you are paying for your new house.

Closing costs are simply the fees associated with purchasing a home or if you are refinancing, you will have to pay as well.

One of the costs that are different from county to county in Maryland is the County Transfer Taxes

The costs may differ somewhat, but this report will give an accurate estimate of what you should expect to pay when buying a home in Maryland.

To find out exactly how much your closing costs would be, please read our entire report about closing costs expenses in Montgomery County MD here: 

https://www.reallynicehomes.com/montgomery-county-homes-sale/what-are-my-closing-costs-when-buying-home-montgomery-county-md/

 

When buying a home in Maryland, you will be required to pay closing costs in addition to the price you are paying for your new house.

Closing costs are simply the fees associated with purchasing a home or if you are refinancing, you will have to pay as well.

One of the costs that are different from county to county in Maryland is the County Transfer Taxes

The costs may differ somewhat, but this report will give an accurate estimate of what you should expect to pay when buying a home in Maryland.

 

The breakdown for each of your charges are as follows:

Title Services and Lender Tittle

You will be charged for Title Services and Lender's Title There are two main types of title insurance: owner’s title insurance, which protects the property owner from title issues, and lender’s title insurance, which protects the mortgage company. 

There are two main types of title insurance: owner’s title insurance (optional to the buyer, but recommended), which protects you as the property owner from any title issues, and the lender’s title insurance, which protects the mortgage company and it is required by your lender. A  lender's title policy will cost you around .5% of the sales price.

Government Recordings and Transfer Taxes 

These charges are typically split equally between the buyer and the seller. They are:

  • County Transfer Taxes
  • State Transfer Taxes
  • County Recordation Taxes

County Transfer Tax: In a purchase of a home Montgomery  County Maryland you and the seller will share this cost 50-50. If the home is valued at $300,000, the county transfer tax is 1% of the sales price. Your portion as a buyer is .5%. In this purchase, the total County Transfer Tax is $3,000  Your portion to pay as a buyer is $1,500

State Transfer Tax:  The State Transfer Taxes is 1/2% of the Home's sales price. Just like the County taxes, this cost is typically split 50-50 between the buyer and the seller. In our example of a $300,000 purchasing price, the total State Transfer Tax is $1,500. Your portion to pay as a buyer is $750

Note: If you are a first-time buyer in Maryland, you do not pay State Transfer Taxes..but the seller will still be obligated their own portion as sellers...in this case, you pay $0 and the sellers still pay $750

Recordation Taxes: The County charges this to both, the buyer and the seller. The total charge is computed with this formula. Take .89% of the sales price up to $500,000. If the house purchase price is above $500,000, you will pay in addition a 1.35% of any portion above $500,000 - Don't over complicate this...both buyer and seller pay .89% up to $500,000 home..if the house is only $300,000...then you only pay $2670 after splitting it worth the seller...Your portion to pay as a buyer is $1,335

If the house was worth $301,000...you would've paid 1.35% of $1000 more..which translates to $135

..and finally, in Montgomery County appreciates the fact that you the buyer intends to use this house as your principal residence..for that reason the State of Maryland gives you back $890 for living in our great state! 

 

Your real estate should provide you with a Closing Disclosure prior to going and signing the documents 

This closing Disclosure (CD) is prepared by the title company that is performing the closing of your purchase. 

The Closing Disclosure  (CD) is a statement of the final loan terms and closing costs and this form contains: 

Loan Terms Disclosure

This part of the CD will show you the exact loan amount...

Interest Rate Charges 

The exact interest rate your lender is charging you

Monthly Principal & Interest 

Your monthly principal & interest payment amount that you are expected to pay on a monthly basis minus insurance and taxes.

Mortgage Insurance 

If you are paying LESS than 20% down payment, your lender will require you to pay for mortgage insurance. Your lender wants to make sure they will get paid, no matter what happens to you. You will pay for the insurance and they get the benefits in case you default on your loan. A typical Mortgage Insurance premium is added to your monthly principal & interest payments. Your portion to pay on a monthly basis will range somewhere between the $200 to $300 range for a $300,000 house. 

Estimated Escrow Amounts 

An escrow is a portion of money kept by your lending institution to pay for property taxes during the year. They generally hold on to this money until it is due and they will pay it for you.  If the yearly taxes on your $300,000 house is $3,000, your lender wants you to pay $3000 in 12 months increments. Meaning that you must add to your monthly principal & interest payment the escrow for your taxes.

If your taxes are $3,000 per year...your portion to pay on a monthly basis will be $250 more per month - This is in addition to your regular mortgage payment and your mortgage insurance.

There are other escrows amounts that you may be required to pay...like special assessments or HOA Extra Charges - Check with your agent and ask specifically, 'Are there any special assessments or other charges that I have to pay on a monthly basis for this property? '

Homeowners Insurance

 We are not finished yet with your monthly mortgage payment. You have to pay Homeowners Insurance as well. Thi sis typically paid by your lender to the insurance company. They want to make sure, if your house burns down, the lending institution will be protected of its investment and they want the house replaced. 

Another factor:  The CLUE report is used by insurance companies to monitor 'problem properties' The CLUE report determines if you will pay a higher premium or not. If the previous homeowners of the house had several property claims for fixing and repairs...you will have to pay a higher premium for insurance on that house. 

Your portion to pay on a monthly basis for homeowners insurance is based on the value of the house, what it costs to replace it and if you bundle it with other insurance like your car ...etc Typically for a $300,000 home, expect to pay around $1000 to $1500 per year. This will add up more or less another $100 to your monthly mortgage payment 

HOA / CONDO Dues

If you are buying a condo, townhouse or a single family home. Typically inMontgomeryy County you are going to be part of a homeowner's or condo association and you will be required to pay for this on a monthly basis. Your portion to pay on a monthly basis will range as little as $30 per month and as high as $1000 or more for some condos in Bethesda | Check with your real estate agent about this prior to signing a purchase contract.

Broker Compensation

 If you are the buyer, you should not have to pay commissions to buy a house. They are typically paid by sellers in Maryland. You may have a small DOC/ ADMIN FEE being charged by the broker of your real estate agent. Expect to pay from $195 to $695  to your real estate agent Brokerage

Appraisal Fee

Your lender wants to be sure that the house you are buying is worth what you are paying for,.For that reason, they want you to hire an appraiser so they can get a report.  Expect to pay from $395 to $695 depending on the value of your property. 

Credit Report 

Yes, your lender will charge you for this as well.  Expect to pay from $35 to $50 depending on the greediness factor of your lender

Flood Determination Fee 

This is mostly for compliance for your lender. They want o to be sure your home was not built in a flood zone. Expect to pay  around $20 

Life of Loan Tax Service

Your lender wants to be sure you pay your property taxes and they have a service company to monitor those payments. Expect to pay around $50- 

Upfront Mortgage Insurance Premium

This is your UMIP  (Up Front Mortgage Insurance Premium)   This payment goes into an escrow account set up bt the U.S Treasury Dept. These funds are used to protect the Government in case you default on your loan. Private mortgage insurance typically costs between 0.5% to 1% of the entire loan amount on an annual basis. 

 Now the charges in the CD breaks down the charges  for the Title Policy

Title Lenders Title Policy 

The home you are buying is possibly your most valuable investment. Before you go to closing, you need to make a decision if you want an owner's policy. Your lender has already made that decision for themselves. ....They want to protect the home with a lender's policy of title insurance.

You, the new homeowner, should also do the same and insist on having an owners' policy as well. 

You will be protected from any future claims or unknown encumbrances on your property. 

Lender's Title Insurance  for a $300,000 house typically costs between $900 -$1200

Homeowner's Title Insurance for a $300,000 house typically costs between $900 -$1200 - So your total cos for a Title Insurance Premium is around the $2,000 range for a $300,000  home. 

Title Survey 

They will survey the title and they will charge you around  $150 

Title Insurance Binder 

They will bind your title insurance and they will charge you around  $25. (Actually, this is just a commitment to issue a title insurance policy at a future date)

More Fees

HOA Dues 

Your HOA fees have to be paid in advance as of midnight the day of closing. You will be taking over this payment and if the seller has paid in advance, you will be reimbursing them for the unused portion.

If your HOA Fee is $100 per month and your closing is on the 15th of the month. You will have to pay $50 to cover the rest of the month HOA charges. 

HOA Set up fee 

Your new HOA will charge you for a setup fee. Typically you will have to pay around $75 for this

 

RECAP:

Under normal circumstances all Purchaser's Fees resembles as follows: 

* Numbers courtesy of Village Settlements in Gaithersburg MD

 

  • Settlement Fee
  • Delivery/Overnight Services
  • Title Examination
  • Title Binder
  • Wire Service Fees
  • Full Title Abstract (add $100 for REO/Foreclosure titles)
  • Add $100 additional if you are only refinancing (release charges) 

Typically you will pay around $800 for this bundle of fees - no matter how much is the property's purchase price.

 

 

 

 If you want to find the best house for the money in Montgomery County Maryland 

This is what we can do for you, 

We will prepare you a list of houses that fit your criteria and take the time to show all these houses to you, with no pressure and no hassle.

So please let us know when you are ready...

If you want to get started now, 

Please call us at 301-246-0001

Or text to 240-426-5754

Email: Info@ReallyNiceHomes.com 

Thinking of selling your home in Montgomery County?  Let Fernando take over the marketing of your property with our unique 99 STEPS system 

www.99SOLD.com - Call or text 240-426-5754 for more information.

 
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