Straight Talk About Real Estate

When you are buying a house, expect to pay approximately 1 1/2 to 2 percent of your loan amount for closing costs.

What do people mean when they refer to recurring closing costs and non-recurring closing costs?

Non-recurring costs are those associated with the purchase of your home, such as title fees, escrow fees, loan fees, transfer taxes, etc. Recurring costs are costs of living in the house that you will expect to pay again. These may include mortgage payment, homeowner’s insurance, property taxes, etc. The recurring costs that you pay at the time of purchase covers you for a period of time until it it time for renewal. For example, you pay homeowner’s insurance as a closing cost covers your insurance for one year. Next year when the insurance expires you will have to pay to renew the insurance. Your first month mortgage payment may be paid at closing as part of your closing costs, but of course you will have to continue to make monthly payments.