For purchases in Maryland involving a loan, a good rule of thumb is 2.75% - 3.0% of the purchase price, plus any loan origination fee or points on the loan. Here's a breakdown of the costs :

• A TITLE INSURANCE policy will be required for the lender and an optional policy for the owner.  Plan on at least $1010.00 for both lender and owner policies on a $250,000 purchase. 
  
• The State of Maryland collects various FEES known as "documentation stamps", "recording taxes", and "transfer tax".  On a RESIDENTIAL RESALE purchase, it is customary to split these fees 50/50 with the seller.  On $250,000, it will be $2750.00.  NEW CONSTRUCTION, however, is different.  It is customary that the Purchaser is responsible to pay ALL of these fees - on a $250,000 new construction project, that means $5,500.00.  So, when you see the builder advertising 'closing cost allowances', they are really not being generous!
  
• The are various LENDER FEES that go by various names such as "Funding fee", "Document prep fee", "Origination fee, etc. Forget the names, just ask the lender for the bottom line total, and a written Good Faith Estimate "GFE".   This will vary by lender.
  
• POINTS may be charged on your loan if you are going after a better interest rate.  Each 1/4 point costs 1% of the loan value.  On a $250,000 loan, one point costs $2500.00.  Loan origination fee is generally one point.
  
• If you have an  ESCROW ACCOUNT that allows the lender to pay your taxes and hazard/fire insurance, the account will need some money to start it off. This will vary depending on where we are in the tax year so that TAXES can be paid.  Six months may be required for taxes (use 1% of sale price as an 'on average' figure for real estate taxes.').  On a $250,000 purchase, taxes should be near $2500.00 (six months escrow would be $1250.00); one year of hazard insurance must be pre-paid, and escrow will collect two more months  ($400.00 per year, plus $67.00 for two months).
  
• If you purchase a home in a community with a HOMEOWNER'S FEE, these fees would also be paid ahead of time.
  
• The FIRST MONTH'S MORTGAGE PAYMENT is also made in escrow, or at least a portion of a month. This is so your first payment is not a partial payment which messes up the bank's bookkeeping. For example, if you close March 15th, you will pay interest until March 31st in the escrow account. Your first mortgage payment will be due May 1st, which pays for April because mortgage payments are always made in arrears.
  
• If you purchase with less than 20% down, expect to pay PRIVATE MORTGAGE INSURANCE, or PMI for short. The portion of the loan over 80% loan to value is the riskiest part for the lender. With low-down government loans like VA and FHA, the government insures this part for the lender. For conventional loans, private insurance companies provide the same service, for a fee. A typical charge is .5-.75% of the loan amount per year, so divide by 12 to get the monthly figure. You start off the escrow account with 2 months up-front, and then a monthly fee until the loan-to-value reaches 80%. This can happen through appreciation, or from just paying down the mortgage over time. You have to request the insurance be removed on your own when you feel you have 20% equity. The insurance company is happy to collect from you forever unless you challenge.
  
• TITLE COMPANY fees vary by company.  They will include an "abstract of title" search, "review" fees, "survey" fees, "deed recording" fees, "courier" fees.  Forget the names, just ask the title company for the bottom line total, and a written Good Faith Estimate "GFE". 

Additional out-of-pocket expenses are the HOME INSPECTION and the series of environmental inspections that may be required:  Lead-based paint test ($150-500); radon ($150), well water testing, including radium ($90-350); on-site septic test ($150-400); termite ($40-50), and any other tests that you write into the offer. When you purchase a resale home, you have the right to hire whatever professional inspectors that you want to look the place over and give you recommendations. This will run from $200-$400, but I always advise that you do it to avoid surprises later. Also, the inspection report gives us third-party documentation when we ask the seller for repairs.

Numbers used are approximations only, and are used for informational purposes only.  Pamela Jo