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Washington DC Real Estate Resource Center: Washington DC Closing Costs

When buying a home, you must prepare yourself for out-of-pocket expenses that extend beyond your down payment. Closing costs, which are on top of the home purchase price, pay for such items as title policies, inspections, recording and legal fees, and lender fees. Closing costs can vary based on the points and fees a mortgage lender charges to make a loan, as well as the home's purchase price. Under Federal law, prospective mortgage lenders are required to provide a Good Faith Estimate to potential homebuyers within three days of applying for a mortgage. Be aware that Good Faith Estimates are in fact estimates, and actual charges may differ. To fully educate yourself and be aware of all options, obtain Good Faith Estimates from two or three lenders and compare the costs.

Items you can expect to find on a Good Faith Estimate include non-recurring closing costs (fees that are paid once and never again), as well as recurring closing costs, such as property taxes, prepaid interest, and mortgage insurance premiums. Non-recurring closing costs can include title policies, escrow fees, notary, attorney fees, endorsements, transfer taxes, home protection plans, inspection fees, and lender fees. Other fees may include appraisal, credit report, broker commission, tax service, processing, underwriting, and recording fees, among others.

Closing costs can be further broken down into those amounts paid to state and local government, which include transfer taxes, recordation fees, and prepaid property taxes, as well as those costs associated with getting a mortgage, which include title insurance, credit checks, appraisals, processing fees, mortgage insurance, and other fees.

When educating yourself on what to expect in closing costs, turn to expert licensed realtor Michelle Buckman. Representing W.C. & A.N. Miller and Christie's Great Estates properties in Chevy Chase, Northwest Washington DC, Capitol Hill, and the Trinidad neighborhood, Michelle works with a full range of clients, notably first-time homebuyers.