Surprised by how many fees show up between offer and closing? You are not alone. If you are buying in Ypsilanti, the mix of lender charges, title fees, taxes, and prepaid items can feel confusing at first. In this guide, you will learn what buyer closing costs include, what totals to expect, how items are handled in Washtenaw County, and the exact steps to estimate your cash to close with confidence. Let’s dive in.
What closing costs include
Closing costs are the fees and prepaid items you pay at closing in addition to your down payment. They cover lender charges, third‑party services like appraisal and title work, government recording and taxes, and prepaid deposits for insurance, taxes, and interest.
As a quick rule of thumb, plan for about 2% to 5% of the purchase price in closing costs and prepaid items. For a $250,000 home, that is roughly $5,000 to $12,500. For a $400,000 home, it is about $8,000 to $20,000. Your lender’s Loan Estimate will show your specific numbers once you apply.
Line‑by‑line costs you will likely see
Lender fees
- Origination or lender fee, often 0.5% to 1% of your loan amount, or a flat fee.
- Underwriting, processing, document prep, usually $400 to $1,200 combined.
- Credit report, about $25 to $60.
- Application or commitment fee if the lender charges one, shown on your Loan Estimate.
- Points to buy down your rate, optional. 1 point = 1% of the loan amount.
Appraisal and inspections
- Appraisal, commonly $400 to $800 depending on property type and complexity.
- General home inspection, typically $300 to $600 for a single‑family home.
- Specialty inspections, if needed, such as radon, pest, well, septic, or sewer scope.
Title and settlement services
- Title search and exam to confirm clear ownership.
- Lender’s title insurance, usually required by your lender. Cost is tied to the loan amount.
- Owner’s title insurance, protects your ownership. Cost depends on price and local custom on who pays.
- Settlement or closing fee, typically $300 to $800.
Title premiums can range from several hundred dollars to a few thousand dollars on higher‑priced homes. In Michigan, rates follow set schedules, and exact figures come from the title company’s quote.
Government and recording charges
- Recording fees for the deed and mortgage. These are set by the Washtenaw County Register of Deeds and vary by document type and page count. Confirm the current fee schedule with the county.
- Michigan state real estate transfer tax of $3.75 per $500 of the purchase price, which equals 0.75%. Who pays can be negotiated.
- Possible local transfer taxes. Some Michigan localities impose an additional transfer tax. Verify if any local tax applies to your Ypsilanti property and who pays in your specific contract.
Prepaids and prorations
- Property taxes prorated between you and the seller based on the closing date. Washtenaw County tax millages vary by parcel, so the title company uses the property’s tax records for exact math.
- First year homeowner’s insurance premium, often due at closing.
- Prepaid mortgage interest from funding date to the end of the month.
- Initial escrow deposits for taxes and insurance, often 2 to 6 months depending on timing and loan program.
- Homeowner association dues and any transfer or move‑in fees if the property is in an HOA or condo association.
Loan‑program specific items
- FHA loans include an upfront mortgage insurance premium, often around 1.75% of the loan amount. This can be financed or paid at closing.
- VA loans charge a funding fee that varies based on service category and down payment; this can be financed or paid at closing.
- Conventional loans may include private mortgage insurance. Some lenders collect an initial premium or escrow reserves for PMI.
Who usually pays what in Washtenaw County
Customs vary by transaction and are negotiable. The purchase agreement should spell out who pays each item.
- Buyers typically pay lender fees, appraisal, lender’s title policy, prepaid interest, escrow deposits for taxes and insurance, homeowner’s insurance, recording of their mortgage, and loan‑program fees like FHA or VA charges.
- Sellers usually pay real estate commissions and, in many Michigan transactions, the owner’s title insurance. Some or all transfer taxes may be paid by the seller, but this is negotiable.
- Both parties share prorations of property taxes and may split recording or municipal items as agreed.
You can also use concessions and credits to shape your bottom line. For example, you might ask the seller to cover up to 2% of your closing costs in exchange for a slightly higher purchase price. Lender credits work in a similar way. You accept a higher interest rate in exchange for a credit at closing that reduces your out‑of‑pocket costs.
Ypsilanti and Washtenaw County specifics to verify
- Transfer taxes: Michigan charges 0.75% state transfer tax. Confirm if any local transfer tax applies to your property and who pays based on your contract.
- Recording fees: Check the current Washtenaw County Register of Deeds fee schedule for deeds, mortgages, and releases.
- Property tax proration: Title will use the parcel’s tax bills and millages to prorate taxes as of closing. Ask for the most recent tax bills to preview likely amounts.
- Special assessments: Confirm any outstanding municipal assessments, utility balances, or tax capture district charges that could appear on the closing statement.
- HOA or condo fees: Budget for prorated dues, transfer fees, and any move‑in charges.
How to estimate your cash to close
Start with the percentage range, then tighten your estimate with written quotes.
- Ask your lender for a Loan Estimate. This shows lender fees, likely appraisal cost, and estimated prepaids and escrows.
- Request an itemized title quote for Ypsilanti or the specific municipality. Include title premiums, owner’s and lender’s policies, settlement fees, and recording estimates.
- Get recent property tax bills and any HOA or condo documents to refine prorations and association charges.
- Build a buffer of a few hundred to a few thousand dollars for last‑minute adjustments, escrow changes, or per‑diem interest.
Pre‑approval document checklist
Gathering documents early speeds up underwriting and helps your estimates stay accurate.
- Government ID
- Recent pay stubs for 30 days and employer contact
- W‑2s for the last 2 years; full tax returns if self‑employed
- Bank statements for all accounts, 2 to 3 months
- Retirement and investment account statements, 2 to 3 months
- Gift letter and donor statements if using gift funds
- List of monthly debts and obligations
- Residency and rental payment history if requested
- Social Security Number for credit pull
- Purchase contract once under contract, plus title company contact
- Homeowner’s insurance quote or agent contact
Timeline and required disclosures
When you apply, your lender will provide a Loan Estimate so you can compare offers and fees. As you approach closing, the lender must provide a Closing Disclosure at least three business days before closing. Title will also issue a final settlement statement showing payoffs, prorations, and who pays which items.
Two quick examples
Use these illustrations to visualize totals. Your numbers will vary based on loan program, taxes, and timing.
$250,000 purchase price
- Typical closing costs and prepaid items at 2% to 5% equal about $5,000 to $12,500.
- This range reflects lender fees, appraisal and inspections, title and recording, one year of insurance, initial escrow deposits, transfer taxes, and prepaid interest.
$400,000 purchase price
- Typical closing costs and prepaid items at 2% to 5% equal about $8,000 to $20,000.
- If using FHA financing, the upfront mortgage insurance may be financed into the loan or paid at closing, which can shift your cash needed.
Smart ways to reduce cash at closing
- Negotiate seller concessions to cover a portion of your closing costs. Your lender will confirm the maximum allowable concession for your loan program.
- Consider lender credits by accepting a slightly higher interest rate in exchange for a credit to offset closing costs.
- Time your closing date toward the end of the month to reduce prepaid interest, while balancing your schedule and move logistics.
- Shop lenders for lower origination and discount point structures and compare total cost over five to seven years, not just the rate.
Next steps for Ypsilanti buyers
- Get fully pre‑approved and request a Loan Estimate from at least two lenders so you can compare costs and cash to close.
- Ask a local title company for a fee quote that includes title premiums, settlement charges, and recording estimates.
- Request the most recent property tax bills for your target home to preview prorations and escrow needs.
- Ask your lender for a sample Closing Disclosure so you know what to expect. You will receive your final one at least three business days before closing.
Ready to map out your numbers with local context and a clear plan? Schedule a consultation with the neighborhood‑focused team at Charles by Reinhart to review a sample closing cost worksheet for your price range and discuss Ypsilanti customs that apply to your purchase.
FAQs
Are buyer closing costs the same as a down payment in Ypsilanti?
- No. Your down payment goes toward the purchase price. Closing costs are separate fees and prepaid items you pay in addition to the down payment.
Can a seller pay my closing costs in Washtenaw County?
- Yes. Seller concessions can cover part or all of your closing costs, subject to loan program limits and what you negotiate in the purchase agreement.
Who usually pays for title insurance in Michigan purchases?
- Local custom varies. In many Michigan transactions the seller pays for the owner’s policy, while the buyer pays for the lender’s policy. Confirm in your contract and title quote.
When will I know my final closing cost total?
- Your lender must provide a Closing Disclosure at least three business days before closing. The title company will also issue a settlement statement that shows all prorations and payoffs.
How are Washtenaw County property taxes handled at closing?
- Property taxes are typically prorated between buyer and seller as of closing. Your lender may also collect initial escrow deposits to ensure taxes and insurance are paid when due.
What happens if the appraisal comes in low on my Ypsilanti home?
- You and the seller may renegotiate price, you may bring more cash to meet loan‑to‑value requirements, or you may dispute the appraisal through your lender. Appraisal fees are not refunded.
