Closing costs vary based on a number of factors. Below are what you can expect to pay for when you buy a home in Connecticut, but don't hesitate to contact us for more information on closing costs and all details about buying Connecticut real estate.
Your closing costs will include:
Items Payable in Connection with your Loan
- These charges vary widely by lender and obviously do not apply if you are not obtaining a loan for your purchase. They include things like a credit report fee, appraisal fee, origination charge, flood certification fee and others depending on the type of loan and lender.
Some lenders require that the buyer escrow money for certain things like property insurance and taxes. An escrow account is simply an account for the buyer that the bank uses to pay the property taxes and homeowners insurance when those bills come due. For those buyers who have escrow accounts, they generally are included in the mortgage payment so the buyer writes one check to the lender which gets broken out into the principle payment, interest payment and escrow payment.
Attorney’s Fees and Title Insurance
In the State of Connecticut real estate is conveyed with the help of attorneys, not title companies. As a buyer, you have the option of choosing your own attorney to represent you in the purchase of your home. For their services the attorneys do charge a fee that depends on several factors.
Most of the time the lender will require that you purchase a title insurance policy at least in the amount of the loan you are borrowing. Your attorney can discuss with you whether or not you would like to purchase an “Owners” title policy to cover you for the full value of your home. The title insurance policy is protection from defects in the title which could cause problems either while you own the property or when you go to sell it in the future.
Recording and Transfer Charges
Once it is official and you have signed the deed, the title, note and mortgage all get recorded on the land records at the town hall (in the town where the property you are purchasing is located). Town halls charge to record these documents based on length.
Real Estate Property Taxes
Since Real Estate Property Taxes are paid in advance you will most likely be reimbursing the seller. Real Estate Property Taxes are paid in January and July so if the annual tax bill for your home is $3,600 that breaks down into 2 payments of $1,800. If you closed on March 31st you would reimburse the seller for the remaining 3 months (April, May & June) for which they paid, but will not have owned the house. The tax adjustment varies based on the month of the closing, but is usually one of the larger line items.
Just like you reimburse the seller for taxes that they paid for but didn’t get to use, it is also customary for the buyer to reimburse the seller for other items they pre-paid. Most commonly these include oil, if the house is heated by domestic heating oil, or propane if it is heated with propane, has a propane range or fireplace, condominium monthly fees if it is a condominium or other special rents or dues depending on the location of the property.