Tip of the Month - March 2006

Understanding Recurring and
Non-recurring Closing Costs

There are two types of costs or expenses in an escrow: the recurring costs and the non-recurring costs. This chart will define and give examples of both types.

Recurring Costs

Costs which the party pays at closing but will continue to occur or be repeated after the escrow closes as a cost of maintaining the property.

• Fire Insurance Premium
• Homeowner's Association Dues
• Real Property Taxes
• Interest on the New Loan

Non-Recurring Costs

Costs which are charged ONE TIME ONLY as an expense of closing the transaction.

• Title Company Expenses such as:
   Title Insurance Premiums
   Recording Fees
   Endorsements to Title Policies
   Sub-Escrow Fee which may be due Title Company
   Reconveyance Fees
   Documentary Transfer Tax
• Escrow Fees
• Notary Fees
• Messenger Fees
• In the case of a refinance:
   Fees Associated With Making an Existing Loan Payoff
• Transfer or Document Fees to a Homeowner's Association
• Lender's Costs such as:
   Appraisal
   Credit Report
   Loan Origination
   Loan Processing
   Document Fees
   Tax Service Contract
• In the case of a sale:
   Real Estate Broker Commissions
   Fees for Property Disclosures or City Reports
   Transaction Coordinator Fee
   Home Warranty Premium

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