Buying your first home in Berkley is exciting, but the final numbers can feel confusing. Beyond your down payment, you will bring “closing costs” to the table, and knowing what they include helps you plan with confidence. In this guide, you will learn what closing costs cover, how much to budget in Berkley, what is negotiable, and how to read the key documents before closing. You will also see simple example budgets so you can estimate your cash to close. Let’s dive in.
What closing costs cover
Closing costs are all upfront fees and prepayments due at settlement in addition to your down payment. These include lender charges, title and settlement services, third-party fees like the appraisal and inspection, prepaid items such as interest, property taxes, and insurance, and any escrow account deposits your lender requires.
You typically pay closing costs with a wire or cashier’s check at closing. Some buyers reduce their cash to close with seller concessions or lender credits, when allowed by their loan program. Your lender will list expected costs on the Loan Estimate and the final numbers on the Closing Disclosure.
How much to budget in Berkley
A practical estimate for buyer closing costs is about 2 percent to 5 percent of the purchase price. Your total can be lower if you receive seller concessions or lender credits, and higher if you have more third-party services or a small down payment that requires mortgage insurance. Local numbers vary by property type and timing.
If you are using a first-time buyer program, such as options offered by the Michigan State Housing Development Authority (MSHDA), you may qualify for down payment or closing cost assistance. These programs usually have income and purchase price limits, so verify eligibility early.
Oakland County’s property tax calendar and due dates affect your escrow deposits and prorations at closing. Lenders use current local tax amounts and billing schedules to determine how many months of taxes and insurance must be collected upfront. Confirm the latest details with the Oakland County Treasurer and the City of Berkley Treasurer when you get close to closing.
Itemized costs you will see
Below are common buyer fees and typical ranges to help you budget. These are estimates for planning. Request quotes from your lender and title company for exact figures.
Loan-related lender fees
- Loan origination, processing, or underwriting: often 0 percent to 1 percent of the loan amount, or flat fees that can total $500 to $3,500.
- Application or processing fee: $300 to $900.
- Underwriting fee: $400 to $900.
- Credit report: $25 to $60.
- Rate lock fee: sometimes $0 to $300.
- Discount points: optional. One point equals 1 percent of the loan amount to reduce your rate.
- Appraisal: $400 to $900 depending on property type and size.
- Small admin items: tax service, flood certification, and similar fees often $10 to $50 each.
- Mortgage insurance: if required for low down payment loans. FHA loans have an upfront mortgage insurance premium; private mortgage insurance varies by borrower profile.
Title, settlement, and title insurance
- Title search and examination: $200 to $600.
- Lender’s title insurance policy: typically tied to the loan amount, often about 0.3 percent to 0.7 percent of the loan.
- Owner’s title insurance policy: optional but recommended, based on purchase price. Who pays can be negotiated depending on local custom.
- Settlement or closing fee: $300 to $800.
- Recording fees: county fees to record your deed and mortgage, often $25 to $150, depending on the number of documents.
- Title endorsements and notary: small additional charges.
Prepaids and escrow account deposits
- Prepaid interest: mortgage interest from your closing date to the first payment date. This varies by your closing day and loan size.
- Homeowner’s insurance: many lenders collect the first year’s premium at closing. A typical range is $700 to $2,000 or more based on coverage.
- Escrow deposits: lenders often collect 2 to 3 months of insurance and taxes to start your escrow account, subject to federal rules on escrow cushions.
- HOA or condo items: prorated dues, transfer or move-in fees, and document review fees when applicable.
Inspections and third-party costs
- Home inspection: $300 to $700, with add-ons for radon or pest tests.
- Pest or wood-destroying insect inspection: $75 to $300.
- Radon or environmental tests: $100 to $250.
- Survey if required: $250 to $1,000 depending on lot complexity.
Government and transfer fees
- Transfer taxes and documentary stamps: amounts and who pays can vary by state and local custom. Confirm with your local title company.
- Recording fees: see the title section above for typical ranges.
Berkley and Oakland County specifics
- Property taxes and timing. Oakland County and the City of Berkley set billing schedules that affect tax prorations and initial escrow collections. Ask your lender and title company to confirm the current calendar and tax amounts for your specific property.
- Transfer taxes and title customs. Who pays transfer taxes and the owner’s title insurance can vary by market custom and negotiation. Your title company will clarify what is typical in Berkley.
- Condo and townhouse notes. Berkley includes older bungalows and some condominium options. For condos, review association dues, rules, and any known or pending assessments before you waive contingencies.
- Where to verify. For exact recording fees, consult the Oakland County Register of Deeds. For tax calendars and amounts, contact the Oakland County Treasurer and City of Berkley Treasurer. Local title companies can quote title premiums and confirm who typically pays each item.
What you can negotiate
Often negotiable or reducible
- Seller concessions within loan program limits. Many first-time buyers ask the seller to contribute a portion of closing costs. Your loan type sets the cap.
- Lender credits and origination. You can request a lender credit in exchange for a slightly higher rate, or negotiate origination and processing fees.
- Owner’s title insurance. In some markets the seller pays for the owner’s policy. This is negotiable.
- Repair credits after inspection. Instead of repairs, you can request a credit that reduces cash to close.
- Shop third-party services. You can shop inspections and insurance for better pricing.
Typically not negotiable
- Government recording fees and taxes.
- Certain title insurance rates if regulated.
- Lender-required escrow deposits. These are set by your actual tax and insurance amounts and federal rules.
Smart strategies for first-time buyers
- Compare Loan Estimates from 2 to 3 lenders, using the same loan type and lock period.
- Confirm local custom for title and transfer taxes before you write an offer.
- Use first-time buyer assistance if you qualify to reduce cash to close.
- If cash is tight, evaluate a small rate increase in exchange for a lender credit.
- Write a clear seller concession request in your offer, within your loan program limits.
Example budgets for Berkley homes
These simple budgets are estimates for planning. Your actual costs will depend on the property, your loan, and the exact timing of your closing.
Example A: Bungalow at $225,000
- About 3 percent scenario: $6,750 total closing costs
- Lender fees and appraisal: $1,800
- Title, recording, and lender’s title policy: $1,200
- Prepaids such as insurance and interest: $1,200
- Escrow deposit for taxes and insurance: $1,800
- Inspections and misc.: $750
- About 4 percent scenario: $9,000 total if escrow cushions or third-party fees run higher
Example B: Mid-market home at $375,000
- About 2.5 percent scenario: $9,375
- About 3.5 percent scenario: $13,125
- Lender fees and appraisal: $2,400
- Title, recording, and title insurance: $1,800
- Prepaids for insurance and interest: $1,600
- Escrow deposit for taxes and insurance: $4,000
- Inspections and other items: $1,325
Example C: Upper-tier or rehab at $600,000
- About 2.5 percent scenario: $15,000
- About 4 percent scenario: $24,000
- Higher appraisals, potential surveys, and larger escrow deposits can increase totals
Documents, timeline, and your prep checklist
Key documents you will see
- Loan Estimate with your initial cost breakdown within 3 business days after application.
- Title Commitment describing the title report and requirements.
- Closing Disclosure at least 3 business days before closing with final figures.
- Settlement statement, mortgage note, deed and mortgage at closing.
Typical timeline to closing
- Offer accepted, then apply for your mortgage promptly.
- Receive your Loan Estimate within 3 business days.
- Complete appraisal and inspections, then clear underwriting conditions.
- Receive your Closing Disclosure at least 3 business days before closing.
- Complete your final walkthrough, then close.
Buyer checklist to avoid last-minute issues
- Review your Closing Disclosure carefully and confirm your cash to close.
- Ask your title company how to deliver funds. Use secure wiring protocols or a cashier’s check to avoid fraud.
- Put your homeowner’s insurance in place and provide the binder to your lender.
- Bring a valid ID and any documents requested by the title company.
- Schedule utility transfers and verify any tax or utility prorations.
How to get accurate quotes
- Call 2 to 3 local lenders and request Loan Estimates for the same loan type and lock period so you can compare apples to apples.
- Ask 1 to 2 local title companies for a quote that includes the settlement fee, lender’s title policy, and any endorsements.
- Contact the Oakland County Treasurer and City of Berkley Treasurer for current tax amounts and billing schedules for the property you are buying.
- For condos, ask the association for current dues, transfer or move-in fees, and any known assessments.
Buying in Berkley should feel clear and manageable. If you want a step-by-step plan tailored to your price point, loan type, and timing, reach out for a personal closing cost review and local introductions to lenders and title partners. Book a consultation with Tom Holzer Homes.
FAQs
What are closing costs for first-time buyers in Berkley?
- Closing costs are the upfront fees and prepayments due at settlement in addition to your down payment, including lender charges, title and recording, appraisal and inspections, and prepaids like insurance and taxes.
How much should I save for closing costs in Berkley, MI?
- A useful estimate is 2 percent to 5 percent of the purchase price, with the final number influenced by your loan type, timing, and whether you receive seller concessions or lender credits.
Can a seller pay my closing costs in Berkley?
- Yes, seller concessions are common for first-time buyers, subject to loan program limits. Your agent can structure your offer to request a specific amount toward your closing costs.
How do Oakland County property taxes affect my cash to close?
- Your lender will collect initial escrow deposits for taxes and insurance based on local tax amounts and due dates, plus prepaid interest from your closing date, which together affect your total cash to close.
What is the difference between the Loan Estimate and Closing Disclosure?
- The Loan Estimate is an early, standardized cost estimate you receive within 3 business days of applying. The Closing Disclosure arrives at least 3 business days before closing with your final, itemized figures.
Do I need owner’s title insurance for a Berkley purchase?
- An owner’s title policy is optional but recommended since it protects your ownership. Who pays for it can be negotiated, so discuss with your agent and title company early.
