How Much Are Closing Costs in New Hampshire?

Closing costs are fees and expenses paid at the conclusion of a real estate transaction. Distinct from the down payment and loan principal, they cover the financial outlays needed to transfer property ownership. They are a substantial financial component for both buyers and sellers, often totaling thousands of dollars. Costs vary based on property location, transaction type, and services involved.

Understanding Closing Costs

Closing costs are fees paid for services by professionals and entities facilitating a real estate transaction. These services ensure the legal and financial integrity of the property transfer. These costs are categorized by purpose.

One primary category includes lender fees, which are charges associated with obtaining a mortgage. These can encompass loan origination fees, which cover the administrative costs of processing the loan, along with underwriting fees for evaluating the loan application.

Another significant group is title and escrow fees, covering the costs for searching property records to confirm clear ownership and for managing the funds and documents until all conditions for the sale are met. Government recording fees are also part of closing costs, paid to local authorities for officially registering the new deed and mortgage.

Finally, prepaid expenses involve payments made at closing for items that will accrue over time, such as property taxes and homeowners insurance premiums, which are often collected to establish an escrow account.

Typical Closing Costs in New Hampshire

In New Hampshire, both buyers and sellers incur various closing costs, some shared, others specific to one party. The New Hampshire Real Estate Transfer Tax is $0.75 per $100 of the sale price for both buyer and seller, totaling $1.50 per $100 for the transaction. Each party pays 0.75% of the sale price; for example, on a $400,000 home, each would pay $3,000.

Title insurance protects against claims or defects in the property’s title. Lender’s title insurance is generally required by mortgage lenders, and an owner’s policy, though optional, is recommended to protect the buyer’s investment. In New Hampshire, buyers typically pay for both policies, which can range from 0.5% to 1% of the home’s sale price.

Attorney fees are common in New Hampshire real estate closings, though not always mandated. Attorneys assist with document preparation, contract review, and closing coordination. Hourly rates can be around $309, or flat fees for straightforward closings typically range from $750 to $1,250. Recording fees are paid to the county to register the deed and mortgage, with sellers sometimes paying around $90.

Lender-specific fees for buyers include loan origination fees, which cover the cost of processing the mortgage, and appraisal fees, usually ranging from $300 to $500, to determine the property’s market value. Credit report fees and underwriting fees are also common charges from the lender.

Prepaid expenses, such as a portion of annual property taxes and homeowners insurance premiums, are typically collected at closing to fund an escrow account for future payments. New Hampshire’s average property tax rate is about 1.51% of the home’s assessed value, and buyers usually prepay 6 to 12 months of these taxes. Home inspection fees, while often paid outside of closing, are highly recommended to assess the property’s condition.

Overall, buyers in New Hampshire can expect their closing costs to range from 2% to 5% of the home’s purchase price. For sellers, average closing costs, excluding real estate agent commissions, are around 3.19% of the home’s sale price. Including real estate commissions, which are often the largest expense for sellers, total seller costs can range from 8% to 10% of the sale price.

Estimating and Managing Closing Costs

Prospective homebuyers who are obtaining a mortgage receive a crucial document called the Loan Estimate shortly after applying for a loan. This three-page form provides a detailed breakdown of the proposed loan terms, estimated monthly payments, and an itemized list of all anticipated closing costs. The Loan Estimate is designed to help borrowers understand their financial obligations and compare offers from different lenders. Lenders are required to provide this document within three business days of receiving a loan application.

Closer to the closing date, typically at least three business days beforehand, buyers receive another important document known as the Closing Disclosure. This five-page form contains the final, confirmed details of the mortgage loan and all associated fees and costs. It is essential to compare the Closing Disclosure with the initial Loan Estimate to identify any significant changes or discrepancies.

Working closely with real estate agents, lenders, and attorneys is advisable to fully understand all fees and charges. These professionals can clarify specific line items and explain how costs are allocated between parties. While many closing costs are fixed, some can be negotiated, or certain services can be shopped for. For example, buyers may have options for choosing their title company or home inspector, potentially influencing those specific fees. Understanding which costs are non-negotiable and which offer flexibility allows for better financial planning and management of the overall transaction expenses.