Real Estate Transactions - Typical Costs

Inspection fees - Paid to a licensed inspector for inspecting your property for defects, potential problem spots and needed repairs prior to the final sale. Paid at the time of the inspection, not at closing.

Homeowners insurance - Must be purchased prior to closing. Insurance companies typically charge the first year's premium up-front. If an escrow account is established with the lender, subsequent premiums are then factored into your monthly mortgage payments.

Loan origination fee - Paid to the lender to cover the expenses incurred in processing and providing the loan.

Appraisal fee - Paid to an appraiser for appraising the value of the property, in conjunction with the mortgage application process.

Credit report - Paid to a credit bureau on behalf of your lender to obtain a copy of your credit report to help determine your credit worthiness.

Flood Zone Determination fee - Paid to determine whether or not your property lies within a flood zone.​​​​​​​​​​​​​

Commitment fee - Paid to the lender as part of the mortgage approval process.

Prepaid interest - Paid to the lender to cover any interest on the loan from the closing date to the beginning of the next calendar month.

Property taxes - Paid to the city and/or county, but only if taxes are due and unpaid at the time of closing. Otherwise, the taxes are prorated, and the amount the seller owes is deducted from the seller's proceeds and credited to the purchaser to cover the tax bill when it comes due. If an escrow account is established with the lender, subsequent property tax costs will be factored into your monthly mortgage payments.

Closing fee - Paid to the closing agent to cover the costs involved with closing on the property.

Abstract/Title search - Paid to a title or abstract company for researching your title's history.

Title examination - Paid to an Attorney to examine the abstract and to issue an opinion as to marketability of title.

Title insurance - Paid to a Iowa Title Guaranty or an out of state title company to cover the lender's policy. An owner's policy also may be made available to you.