Mortgage Closing Costs: What Can You Expect

You found the perfect house, saved for a down payment, and applied for a mortgage. But what types of expenses (mortgage closing costs) can you expect?

To help you prepare, Ruthie Dickinson, NMLS# 2717623, Prevail Bank Mortgage Loan Originator in Stevens Point and Baraboo, Wisconsin provides a list of the possible expenses (closing costs) you might incur when purchasing a home.  Some closing costs are typically paid by the seller, some can be shared or negotiated as part of your offer, and other closing fees are required by your lender to obtain a loan.

Typical Closing Costs

Buyer:

• Origination Fee
• Document Preparation Fees
• Appraisal
• Appraisal Review Fee
• Credit Report
• Flood Zone Determination
• Tax Monitoring Fee
• Tax Transcript Fee
• Verification of Employment Fee
• Wire Fees
• Courier Fees
• Lender’s Policy of Title Insurance
• Title Company Settlement Fee
• Recording Fees
• Real Estate Commission
• Home Inspection

In some cases, buyer closing costs can be negotiated as shared expenses with the seller on your sales contract.
 
Seller:

• Real Estate Commission
• Real Estate Transfer Fee
• Owner’s Policy of Title Insurance

Explanation of Individual Fees

Origination Fee:
An origination fee is charged by the mortgage lender for making the loan. It covers the administrative services of the loan application.

Document Preparation Fees:
This fee covers the time and services involved in acquiring all the necessary documentation and information to complete the processing of your loan, in addition to bringing it to the closing table as an organized booklet of legal documents.

Appraisal:
An independent appraiser prepares a report that compares the property you are purchasing with similar properties that have recently sold. Your property’s appraised value should be at or near the agreed upon purchase price for a successful sale.

Appraisal Review Fee:
This is an analysis of the appraisal; it ensures the report is accurate and in compliance.

Credit Report:
This fee covers the cost of the credit report. It shows your payment history on loans and credit cards, credit utilization, residence history, and name variations.

Flood Zone Determination:
Every property, regardless of location, must be checked for flood zone status. A third-party verification is needed before it is considered complete. If the property is located in a flood plain, flood insurance will be required.

Tax Monitoring Fee:
A tax monitoring service provides lenders with annual receipts when you pay your taxes in full, in addition to alerting them to any unpaid taxes that could become a tax lien.

Tax Transcript Fee:
Lenders may request a copy of your tax transcripts to make sure the income on your W-2 matches the tax returns you filed with the IRS. Tax transcripts are also used to confirm income for self-employed individuals.

Verification of Employment Fee:
In addition to using W-2s and current paycheck stubs for income calculations, lenders may verify income by contacting the employer to verify dates of employment and income figures. Many employers utilize data companies to provide this service, and this cost is part of the process for qualifying for a loan.

Wire Fees:
If funds are wired (sent electronically) to complete the sale of a property or to refinance existing debt, expect a wire fee.

Courier Fees:
If any documents are mailed for an overnight delivery (IE: Federal Express or UPS), you can expect courier fees at closing.

Lender’s Policy of Title Insurance:
A Lender’s Policy of Title Insurance is required to complete the loan process. Title Insurance tells the lender and the buyer what outstanding loans, liens, and judgments are against the property; these loans, liens, and judgments will need to be taken care of before the sale can be completed. It will also detail any easements for either access or utilities that are part of the property. The Policy protects the lender by ensuring their mortgage takes priority over any other claims. 

Title Company Settlement Fee:
The title company makes sure that all title issues are resolved before closing and that the mortgage is recorded properly in the appropriate county.  The title company also disperses all funds for the purchase transaction ensuring all parties are paid as needed.

Recording Fees:
In whichever county your purchased property resides, documents need to be recorded in that county’s court house, so your purchase is officially ‘of record’. This is the fee the County charges.

Real Estate Commissions:
Both the buyer and seller incur real estate commission fees for services provided. This is negotiated as part of the offer process.

Home Inspections:
An independently licensed home inspector can inspect your house for safety and soundness. Requesting an inspection is negotiated as part of the offer process. The inspector looks for specific issues and conditions related to roofs, foundations, electrical, plumbing, heating, and cooling systems. A home inspection is not required but is recommended to ensure you are made aware of any defects in the property that may need repair.

Seller Fees

Real Estate Commissions:
A seller will pay a listing commission to the listing agent. The fee for the buyer’s services is negotiated as part of the offer process and may, or may not, be included in the overall commission paid by the seller.

Transfer Fee:
The seller pays a transfer fee to the State of Wisconsin when the sale is recorded at the court house. Occasionally the seller may ask the buyer to pay this cost.

Owner’s Policy of Title Insurance:
The official offer to purchase in the State of Wisconsin says the seller is responsible for providing proof of clear title at closing in the form of an Owner’s Policy of Title Insurance. In Wisconsin, this is typically paid for by the seller and is noted as such in the offer to purchase.  An Owner’s Policy protects your equity in the property against future title defects or claims that may arise.

Seller Paid Closing Costs:
As part of offer negotiations, a buyer can request that a seller pay all, or a portion, of the buyer’s closing costs. This is a negotiated item and must be addressed when the offer is being written. This request becomes less common in a highly competitive market, because it means more money out of the seller’s pocket at closing.


The closing costs owed when you purchase a home can be substantial. Specific costs vary depending on the type of property, whether you are using financing, and by the terms of your purchase agreement. A good rule of thumb is to plan on paying an additional 2% to 4% of the property’s sales price as out-of-pocket closing costs, in addition to your down payment.

When you apply for a mortgage loan your lender is required to provide you with an official Loan Estimate which provides you with a breakdown of the expected fees associated with your loan. The Loan Estimate also provides you with a shopping tool to help you compare fees from different lenders.

When your loan is ready for closing your lender will provide you with a Closing Disclosure.  The Closing Disclosure provides you with an updated breakdown of your loan costs and a more accurate amount for your cash to close. 

Meet the Lender

Ruthie Dickinson (NMLS# 2717623)
*Serving our Stevens Point & Baraboo locations.

“I have a passion for helping my customers and creating a lasting relationship. I can’t wait to help you all get into your perfect home while setting you up financially to be successful. My joy comes from seeing others thrive! Outside of work my family and I enjoy all things outdoors! You can usually find us hiking, fishing, or spending time with family! I look forward to working with you on your next home purchase!” 

Prevail Bank – Member FDIC | Equal Housing Lender
Prevail Bank NMLS#:  490977