Key points
- Closing costs fall into four groups: lender charges, title and legal charges, government fees and taxes, and prepaid items.
- The Massachusetts deed excise is paid by the person who signs the deed, normally the seller.
- A lender’s title policy is usually required; an owner’s policy is optional and paid once.
- Prepaid tax, insurance and interest are not fees, but they are cash due at closing.
Four groups of costs
Exact amounts depend on the lender, the loan, the price and the closing date. The structure below is what to expect.
| Group | Typical items | Notes |
|---|---|---|
| Lender charges | Origination or application fee, discount points, appraisal, credit report | The main basis for comparing lenders |
| Title & legal | Title examination, lender’s title policy, optional owner’s policy, attorney and settlement fees | Ask your attorney for a written fee quote |
| Government | Recording fees for the deed and mortgage, municipal lien certificate | Set by the Registry and the municipality |
| Prepaids & escrow | First-year homeowners insurance, property tax escrow deposit, interest to the end of the month | Vary with the closing date and the tax calendar |
Who usually pays what
The contract controls, but the usual division in Massachusetts is consistent. The buyer pays the lender’s charges, title insurance, the recording of the deed and mortgage and the buyer’s own attorney. The seller pays the deed excise, the payoff and discharge of any existing mortgage, broker compensation as agreed, and the smoke and carbon monoxide certificate.
Outside Barnstable County the combined deed excise is $2.28 for each $500 of the price or fraction of $500, about $4.56 per $1,000: $4,560 on a $1,000,000 sale. Property tax, condominium fees and, where a home has oil heat, the fuel in the tank are usually prorated to the closing date.
Reading the Loan Estimate and Closing Disclosure
Both forms use the same layout so they can be compared line by line. Loan Costs are grouped as origination charges (A), services you cannot shop for (B) and services you can shop for (C). Other Costs cover taxes and government fees (E), prepaids (F), the initial escrow deposit (G) and other items (H).
Federal rules limit how much certain charges can rise between the estimate and closing. If a figure on the Closing Disclosure differs from the estimate, ask the lender why before the closing date.
Cash to close
The Closing Disclosure ends with a single figure, Cash to Close. It is built from these pieces:
- Down payment, less the deposits already paid at offer and at the purchase and sale agreement
- Closing costs from the four groups above
- Less any seller credit or lender credit agreed in writing
- Count each item once; deposits already paid are credited against the price
- Funds usually arrive by wire. Confirm wiring instructions by phone with your attorney at a number you already know; never rely on instructions received only by email.
Ask for estimates early
Request a Loan Estimate from more than one lender if you are comparing loans, and ask your attorney for a written fee quote before you sign the purchase and sale agreement. Small differences between lenders compound over the life of a loan, and surprises in the final week are hard to fix.
General information, current as of the date shown. The deed excise rate shown applies outside Barnstable County. Your lender and attorney will provide figures for your transaction.