PROPERTY TAXES

This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the seller occupied the property.

HOMEOWNER'S INSURANCE

This is the cost of insuring your home against loss from fire and other hazards.  You choose the company you want to work with and we'll collect the insurance premium from you at closing and pay the insurance company at closing.
 

HOMEOWNERS ASSOCIATION DUES OR HOA

HOA is collected at closing and the amount collected depends on the dues and any fees the HOA may charge.  For example, HOAs may charge a "Working Capital Contribution" equal to a couple months of HOA dues.  They may also charge a fee to prepare documents called HOA Certification Fee. They may also charge to transfer HOA papers to your name, called an HOA Transfer Fee. When buying a condo, keep in mind there may be additional fees that are not typically paid when buying a single family home that is not located in an HOA.

PREPAID INTEREST

Prepaid interest is collected at closing and the amount collected depends on the day your loan closes.  For example, if you close your loan on the 15th of a month you would be responsible for paying interest from the 15th through the last day of that month.  The closer to the end of the month you close your loan, the less interest you pay at closing.  Don't get confused by thinking that you save money this way.  You will pay interest no matter what but the benefit to you closing toward the end of the month is needed less money at closing.