Norwalk, Connecticut, Real Estate Lawyer
First time home buyers have a lot of questions. At the law office of Carl Ferraro, Attorney at Law, we are able to answer your questions and guide you through every step of the purchase process. Our firm will work closely with you to ensure that your needs are met, your concerns addressed, and your transaction is successfully completed to ensure you are not faced with any unexpected problems or issues in the future.
If you are a first time home buyer, contact us today to ensure your real estate transaction is handled properly and with the necessary attention to detail. Our firm will get to know you and your goals in a free initial consultation with an experienced real estate attorney.
Closing Costs in Connecticut
One of the most common questions we hear from both first time home buyers and sellers is: What are my closing costs? Closing costs in Connecticut vary greatly depending upon who you choose as a mortgage lender, your credit score, and the price of the property you are purchasing. The typical closing costs for a real estate transaction in Connecticut are illustrated in the following example*:
A first time home buyer desires to purchase a $390,000.00 home in Stratford, Connecticut. The purchaser of this house has a good credit score, and the mortgage lender (bank) is not requiring him to pay any points. Additionally, the purchaser (borrower) thinks he is not paying a mortgage broker any compensation, or any premium in order to receive a loan at a reduced interest rate. (Note that if the purchaser was to pay any points in the form of a loan origination or loan discount fee that one (1) point would be equal to $3,900.00).
The yearly real estate taxes on this house are $4,787.64 and his homeowner’s insurance carries a yearly premium of $810.96. The closing will take place on June 5th of any given year.
In addition to the purchase price, the purchaser will pay the following at the time of closing:
- Fuel oil adjustment
Equal to the amount of oil or propane that is left at the house at the time of closing. This is paid to the seller.
- Tax adjustment: $341.12
Paid to the seller to adjust for taxes prepaid by Seller through June 30th
- Sewer Adjustment: $15.60
Stratford has a separate sewer fee in addition to the yearly real estate tax. Not all towns have this charge. We will determine what, if anything, is due at the time of closing.
- Appraisal fee: $300.00
Fee charged by this particular bank. Appraisal fees vary by lender.
- Credit report fee: $19.22
Fee charged by this lender. Credit report fees vary by lender.
- Funding Fee: $700.00
Fee charged by this lender. Funding fees vary by lender.
- Tax service fee: $75.00
Fee charged by this lender. Varies by lender.
- Flood determination fee: $12.00
Fee charged by this lender, but you guessed it--your lender may charge more or less.
- Broker loan discount fee: $6,240.00
Oops, what is this? The borrower did not pay the bank any points but he forgot that he signed a document with his mortgage broker to pay him. The moral is: know what you are signing, and if you have any questions contact your lawyer--that is why you are paying us.
- Prepaid interest: $1,549.17
This is, in effect, your first mortgage payment. It is due at closing and is prorated for the number of days left in the month.
- Hazard insurance escrow: $270.32
Hazard insurance (homeowners insurance) is escrowed by this lender and then paid when due to the insurance company. A four (4) month escrow was required. Escrow requirements vary by lender. Ask your attorney to explain this further.
- City property tax escrow: $398.97
Real estate taxes are escrowed by this lender and then paid when due to the city. A two (2) month escrow was required. Escrow requirements vary by lender and the time of year that you close. Ask your attorney to explain this further.
- Title Search: $160.00
This will vary.
- Attorney fees: $950.00
This is my typical fee, and it varies by attorney. Many attorneys charge fees between $600.00 and $1,500.00. Be careful not to choose a lawyer based solely on price because you do get what you pay for. Trust us. We have seen it all--there is nothing worse than a lawyer who charges $500.00 for a closing and then has no idea what he is doing or will not call you back when you have a question.
- Title Insurance: $1,452.00
Required by the lender. The premium varies by purchase price--not by attorney.
- Recording fees: $203.00
The actual cost to record the deed and mortgage on the land records in this transaction. This cost will vary depending on the number of pages to be recorded.
- Overnight mail and wire transfer fees: $100.00
- Record and rundown: $55.00
Essentially an update of the title search at the time your mortgage and deed are recorded. It verifies that no additional encumbrances were placed on your new home since the time the title search was performed. Why do you need this? What could be worse than buying your new home then finding out two weeks later that the seller forgot (sure he did) to pay the contractor who just so happened to place a lien on the property one day before you bought it.
CAUTION: THESE ARE FEES FROM AN ACTUAL CLOSING FROM JUNE 2006. ALL BANKS CHARGE DIFFERENT FEES, SOME MORE SOME LESS, AND MANY HAVE FEES THAT ARE NOT MENTIONED IN THIS EXAMPLE. CHOOSE YOUR MORTGAGE LENDER CAREFULLY AND ASK THEM WHAT THEIR CLOSING COSTS ARE BEFORE YOU SIGN ANY DOCUMENTS.
Closing costs for the seller of this example were:
- Real estate commission: $19,500.00
This is five percent and is typical.
- Mortgage Payoff: $200,000.00
This is not the amount due on your mortgage statement. An actual payoff must be ordered from your bank and the final amount due will include your principal balance, interest, any fees due your bank, etc.
- Release fee: $43.00
The cost to record a release of your mortgage on the land records. Town hall charges $43.00 for each one-page release. If you have more than one mortgage (remember a line of credit is a mortgage) then you will be charged for each release.
- City conveyance tax: $975.00
There are some cities in Connecticut that charge conveyance tax based upon one half of one percent of the sale price but most charge one quarter of one percent.
- State conveyance tax: $1,950.00
Conveyance tax to the State is one half of one percent of the purchase price up to an $800,000.00 sale price. The excess over $800,000.00 is taxed at one percent.
- Final water bill: $50.25
- Attorney fees: $1,000.00
This is the fee charged by the seller's attorney.
If you are a first time home buyer, you likely feel nervous and uncertain about the process. However, you do not need to feel nervous because at the law office of Carl Ferraro, Attorney at Law, we know what we are doing. We will guide you through every step of the process with confidence and attention to your individual concerns and objectives.
Contact us today to arrange a free initial consultation regarding the purchase of your first home. Please call (203) 866-6503 or (203) 247-1495.
*DISCLAIMER: This example is for informational purposes only. All fees are subject to change at any time based upon the circumstances of your particular matter. This example will, however, provide you with a general idea of closing costs. Call me if you would like a free analysis of your situation.
