Closing Costs in New Jersey: What Buyers Should Expect

What closing costs generally cover

Closing costs are the fees and prepaid items due at settlement beyond the down payment. They typically fall into a few broad categories: lender fees, third-party services, government charges and prepaid items like taxes and insurance.

Common categories buyers see

• Lender fees, such as origination or underwriting charges.
• Title insurance and settlement or attorney fees.
• Appraisal and credit report fees.
• Government recording fees for the deed and mortgage.
• Prepaid interest, homeowners insurance and property tax escrow reserves.

New Jersey-specific items

New Jersey imposes a realty transfer fee on the sale of property, generally paid by the seller, with the amount tied to the sale price and certain exemptions available. Attorney review is also common in New Jersey transactions, adding legal fees that aren't universal in every state.

Who typically pays what

Buyers and sellers each have costs associated with their side of the transaction. Buyers generally cover lender-related fees and their own title insurance policy, while sellers commonly cover the realty transfer fee and, in some cases, a portion of the buyer's closing costs if negotiated as a concession.

Ways buyers sometimes offset closing costs

Depending on the loan program and negotiation, some buyers reduce out-of-pocket closing costs through seller concessions, lender credits, or down payment assistance programs that also cover closing costs. Eligibility and limits vary by program.

How to get an accurate number for your purchase

Because closing costs depend on price, location, loan type and the service providers involved, general estimates only go so far. A loan estimate prepared for your specific transaction will itemize the actual figures once you're working with a lender on a property.