How Much Are Closing Costs in Mississippi?

Understanding closing costs is crucial for effective financial planning when buying or selling property in Mississippi. These costs encompass various fees and expenses incurred during the final stages of a real estate transaction. Awareness helps individuals budget accurately and avoid unexpected financial burdens as they approach the closing date.

What Are Closing Costs?

Closing costs are expenses paid at the culmination of a real estate transaction. These fees cover services and charges necessary to finalize the sale and transfer ownership, including professional services, administrative tasks, and governmental charges.

These costs include loan processing fees for underwriting and preparing loan documents. Title and escrow services also include ensuring clear ownership and secure exchange of funds and documents. Government recording fees register property ownership changes and mortgages. Various prepaid expenses, such as initial deposits for property taxes and homeowner’s insurance, are also included. Total closing costs vary based on property location, financing type, and transaction details.

Buyer-Specific Closing Costs in Mississippi

Buyers in Mississippi incur closing costs, generally 2% to 5% of the home’s purchase price. Common costs include loan origination fees, around 1% of the loan amount for processing the mortgage. An appraisal fee ($300-$500) ensures the property’s value supports the loan amount, while a credit report fee (around $30) covers accessing the buyer’s credit history.

Buyers may also face flood certification fees ($15-$20) if the property is in a designated flood zone, and prepaid interest from closing to the first mortgage payment. Initial escrow account deposits fund future property tax and homeowner’s insurance payments. While owner’s title insurance is customarily paid by the seller in Mississippi, the buyer typically pays for the lender’s title insurance, which protects the lender’s investment. Recording fees for the deed and mortgage are the buyer’s responsibility, around $50, varying by county. Buyers may also incur attorney fees ($750-$1,250) if they retain legal counsel (often recommended though optional).

Seller-Specific Closing Costs in Mississippi

Sellers in Mississippi bear closing costs, averaging around 2.87% of the home’s purchase price, not including real estate commissions. A significant expense for sellers is the real estate agent commission, averaging 5.41% of the sale price, covering both listing and buyer’s agent fees. This commission is generally deducted from the sale proceeds at closing.

Sellers are responsible for paying off outstanding mortgage balances. They also cover prorated property taxes for their portion of the annual tax bill up to the closing date. Mississippi property taxes are paid in arrears, meaning the seller provides a credit to the buyer for unpaid taxes from January 1 through the closing date. Title search fees are typically paid by the seller, and sellers customarily pay for the owner’s title insurance policy, which protects the buyer from future title defects. This cost is typically around $484 or 0.25% of the sale price, depending on the property value. Recording fees for the deed may be a seller’s expense. Sellers may engage an attorney (not legally required), incurring fees similar to those for buyers.

Factors Influencing Total Closing Costs

Elements influence the total amount of closing costs for both buyers and sellers in Mississippi. The property’s purchase price and the loan amount are primary drivers, as many fees (e.g., title insurance premiums, loan origination charges) are calculated as a percentage of these values. A higher purchase price or loan amount will proportionally increase these specific costs.

The type of loan secured affects costs. Conventional, FHA, or VA loans have different fee schedules, sometimes including specific upfront mortgage insurance premiums or different appraisal requirements. Local variations also play a role; county or municipal recording fees can differ by jurisdiction.

The choice of lender and title company can lead to variations in fees for similar services, as these entities set their own pricing. A borrower’s credit score can indirectly influence loan-related fees, as a lower score might result in higher interest rates or additional lender charges. Negotiating certain costs between the buyer and seller, such as title insurance policies or other fees, can impact the final financial burden on each party.

Reviewing Your Closing Disclosure

The Closing Disclosure (CD) is a five-page document that provides final details about your mortgage loan and an itemized breakdown of all closing costs. This document ensures transparency and allows for final financial verification before the real estate transaction is complete. It outlines the loan terms, projected monthly payments, and a list of what the buyer and seller will pay.

Reviewing the Closing Disclosure is essential to identify any discrepancies or unexpected charges. Buyers should compare the figures on the CD with their initial Loan Estimate to ensure consistency. Scrutinize the loan terms, itemized fees and services, and the accuracy of prorated amounts (e.g., property taxes). Confirm all credits (e.g., earnest money deposits or seller concessions) are correctly applied. The Closing Disclosure must be provided to the buyer at least three business days before closing, allowing time to review it and address any questions or concerns with the lender or settlement agent.