Closing costs in Maryland can be roughly estimated to range between $3000 to $6000. This usually equates to 3% percent to 6% percent, based on the loan amount. Closing costs are the extra costs that come with buying a new home. If you’re a first-time homebuyer and wondering how to determine closing costs when purchasing a home, then read on as we’ve highlighted all the costs associated with purchasing a home in Maryland. The best way to estimate closing costs is to consult a financial institution, title firm or real estate agent. They are best placed to calculate closing costs for a prospective client. The key elements of closing fees are the local and state recording and transfer charges, mortgage lender rates and approximately 13 months’ closing fees or escrow for property taxes. It is well known that the state of Maryland has some of the highest fees in closing costs, thanks to the high state and local government recording and transfer fees, as well as a condition that property taxes should be paid a year beforehand. Recently, the state passed a resolution whereby a homeowner or buyer can choose to pay property taxes on a bi-annual basis, effectively decreasing the amount of closing fees or escrow that one would be required to pay in 6 or 7 months’ time.
Every district in Maryland has its own recording and transfer fees, and hence, the amount you will pay will vary from jurisdiction to jurisdiction. As a potential home buyer, you will need to pay the majority of the taxes and fees.
Here are the closing costs in Maryland that come with buying a house:
The typical closing cost for a no cash-out refinance in Maryland is 1.1 percent of the mortgage amount.
The typical closing cost for a home purchase in Maryland is 2.2 percent of the mortgage amount.
The typical closing cost for a cash-out refinance in Maryland is 1.1 percent of the mortgage amount.
The typical closing costs in Maryland ranges from around 1.1 percent to 2.2 percent based on the kind of loan (a refinance or purchase loan).
A refinance in Maryland is around 1.1 percent of the mortgage amount while a purchase is around 2.2 percent in closing costs.
What Are Closing Costs?
To get a better understanding of closing costs, you should first understand the term ‘closing’:
Closing refers to the process of completing the sale of a house. During this stage, the closing documents are signed and then processed before the cash is paid and homeownership transferred to the buying party.
When buying a home, there are charges involved and these are paid at the closing of the deal. The closing costs in Maryland should be paid the moment the property title is transferred to the buyer. The closing costs include all the charges involved in this process. These charges are around 2 to 7 percent of the property’s final selling price and are shared between the seller and the buyer.
Here are the most common types of closing costs in Maryland:
Property title search
Title insurance
Inspection fees
Appraisal fees
Escrow Fee
Survey Fee
Credit report fee
Loan payoff fees
Attorney fee
Transfer taxes
Recording costs
Prepayment penalty
Outstanding balance
How to Estimate The Maryland Closing Costs?
With so many different types of closing costs in Maryland, you can expect to deal with a lot of documents before and during the signing process.
Usually, sellers and buyers will need to cover closing costs separately. Nonetheless, what each party pays is negotiable. For instance, a buyer can request a seller to cover part of the closing costs in a transaction. To find out if that is the right thing for you, it’s important to understand the various closing costs in the state of Maryland.
Closing cost calculator Maryland
Here is a list of closing costs in Maryland:
Title Search Fee (Around $300 to $600)
The title search allows the current owner to sell their home. In other words, it helps to ensure that that property is rightfully theirs. The fee varies, but Realtor.com puts the figure at $300 to $600.
Title Insurance ($1,000)
Title Insurance protects the lenders and buyers against any discrepancies in the prior owner’s title, which could be detected after the closing phase. The title insurance fee is typically $1,000.
Home inspection (About $300 to $500)
Home inspection is carried out to identify any issues with the property. It is a great way to determine the condition of the home before closing. A home inspection in Maryland usually costs around $300 to $500.
Appraisal Fee (About $300 to $400)
Appraisals help to determine the value of the property to check whether it acts as security for the mortgage loan. The fee varies, but fixr.com puts the figure at around $300 to $400.
Survey (about $345-$676)
A survey is used to determine a home’s legal limits. The experts at HomeAdvisor put the figure at around $345-$676.
Credit Report Fee ($20 to $50)
When applying for a mortgage, buyers undergo checks to ensure they are creditworthy. Credit reports normally cost about $20 to $50.
Early Payoff (0.5-1.5 Percent of the Sales Price)
These costs usually include prepaid interest rates, assumption and loan origination fees. Typically, these cost 0.5-1.5 percent of the final closing price.
Prepayment Penalty
In case you pay off your loan before the agreed period, you may incur some charges. These will vary from one lender to another, so you’ll need to confirm this first.
Outstanding Amount
Any outstanding amounts for HOA fees or homeowners insurance are prorated to the date of closing. Therefore, you will be required to pay the outstanding balances before the property can be transferred to the buyer.
Transfer Taxes (0.5%)
The rates vary from one county to another, but Maryland home sellers can generally expect to pay 0.5 percent transfer taxes on sales. For first-time homebuyers, the rate is reduced to 0.25%.
Recording Fee (Varies)
Recording fees include the fee for recording a deed at a local court. Such fees will vary from one county to another.
Attorney Fee (Varies)
During the closing process, you might be required to pay a given settlement amount to a title agent or escrow. Moreover, all Maryland home sales require the input of an attorney who is responsible for handling the legal paperwork. Their fees will vary considerably.
Recordation Tax ($750)
In Maryland, all home sales attract a recordation tax of $750. Selling real estate is a costly affair, so you need to find ways to save as much money as possible. Partnering with a real estate agent can help you save a great deal of money.
Maryland Seller Closing Costs
Closing costs vary for both the seller and the buyer. Maryland closing costs for home sellers cover the cost of transferring homeownership, authenticating the title and clearing any outstanding amounts. They include:
Title searches
Transfer taxes
Title insurance
Mortgage payoff charges
Prepayment penalties
Attorney fees
Outstanding balances
Closing Costs for Buyers
The closing costs for home buyers in Maryland revolve around taking out a home mortgage loan. They include credit checks and mortgage origination fees.
Other costs that you should expect include:
Title insurance
Home inspection
Survey fees
Appraisal fees
Recording fees
Attorney fees
Loan Origination fee
Conclusion
Closing costs are unavoidable when selling or buying a home. The exact figure will differ depending on the location of the property in Maryland. One can save a great deal of money by learning how to reduce the closing costs. To learn how to reduce the closing costs, please do not hesitate to contact us.
Closing costs are a catch-all term for all expenses incurred during the last stages of a home sale. We’ll go through each one in detail to give you an idea of what to expect when selling a home in Maryland. Buyers and sellers pay a variety of extra expenditures, collectively known as closing costs, when completing, or “closing on,” a home sale. Buyers and sellers are usually responsible for their own closing costs. Who pays what is, however, debatable; a buyer may ask you to cover some of their closing fees as part of their offer. To figure out if that’s a good option for you, you’ll need to know everything there is to know about Maryland closing expenses.
