When you budget for a home purchase, the down payment is only part of the picture. Closing costs are additional fees and expenses you pay at closing, and they typically range from 2% to 5% of the purchase price. Understanding these costs helps you plan your total budget.
Common Buyer Closing Costs in New Jersey
- Appraisal fee: Paid to assess the home's value for the lender
- Home inspection: Paid to evaluate the home's condition
- Attorney fees: For contract review and closing representation
- Title insurance: Lender's policy is typically required; owner's policy is optional but recommended
- Recording fees: For recording the deed and mortgage with the county
- Survey: If required by the lender or title company
- Credit report fee: Charged by the lender
Prepaid Items
In addition to closing costs, you will pay for certain items in advance at closing:
- Property taxes (prorated based on closing date)
- Homeowners insurance premiums
- Mortgage interest from closing date to end of month
- PMI premiums (if applicable)
How to Estimate Your Closing Costs
Your lender is required to provide a Loan Estimate within three business days of receiving your loan application. This document shows your estimated closing costs. Review it carefully and ask your lender about any items you do not understand.
Can You Reduce Closing Costs?
Some strategies to reduce your closing costs include negotiating seller concessions, shopping around for title insurance, and asking your lender about no-closing-cost loan options (which typically come with a higher interest rate). Some first-time buyer programs also offer closing cost assistance.
More Articles for New Jersey Home Buyers
Learn about down payments, credit scores, and pre-approval. For a full overview, visit our buyer resources hub.
Christian Tibok
New Jersey REALTOR with Fathom Realty NJ LLC. Christian walks buyers through every closing cost so there are no surprises at the table. Learn more about Christian.