Closing Costs Explained: What Georgia Homebuyers Should Expect to Pay

You've saved for your down payment. You've been pre-approved for a mortgage. Then you hear another number:

Your closing costs.

Closing costs are the fees and expenses required to complete your mortgage and home purchase. They're generally paid in addition to your down payment, which is why buyers should start planning for them well before closing day.

How Much Are Closing Costs?

A common estimate is approximately 2% to 5% of the home's purchase price, although your actual costs depend on your mortgage, property, location, and transaction.

Here's what that could look like:

These are estimates, not quotes. Your actual costs could be higher or lower.

What Are You Actually Paying For?

Closing costs aren't one big fee. They're a collection of expenses involved in completing the mortgage and transferring the property.

Depending on your purchase, they may include:

• Lender and loan origination fees
• Credit report fees
• Appraisal
• Title services and title insurance
• Attorney or closing fees
• Government recording fees and taxes
• Homeowners insurance
• Prepaid property taxes and interest
• Money placed into your escrow account for future taxes and insurance

Not every buyer will pay every expense.

Georgia Buyers Have a Closing Attorney

Here's one difference Georgia buyers should know about.

In Georgia, a licensed attorney conducts the real estate closing.

That means your closing expenses may include an attorney or closing fee. The attorney handles important legal aspects of the transaction and oversees the closing process.

If you've been reading national homebuying information that talks about an escrow or settlement company conducting the closing, don't be surprised when your Georgia transaction involves a closing attorney instead.

Don't Forget Georgia's Intangible Recording Tax

Georgia also imposes an Intangible Recording Tax on long-term notes secured by real estate.

The tax is calculated at $1.50 for every $500 borrowed, which is essentially $3 for every $1,000.

For example:

$300,000 mortgage × $3 per $1,000 = approximately $900

That's separate from your down payment and is one of the Georgia-specific costs that can appear as part of your transaction.

Your Loan Estimate Gives You an Early Look

You shouldn't have to wait until closing day to discover what you're expected to pay.

After you submit the information required for a mortgage application, your lender generally must provide a Loan Estimate within three business days.

The Loan Estimate shows important information including your:

• Estimated interest rate
• Monthly mortgage payment
• Loan costs
• Estimated closing costs
• Taxes and insurance
• Estimated cash needed to close

Because lenders use a standardized form, Loan Estimates also make it easier to compare mortgage offers.

Then Comes Your Closing Disclosure

Before closing, you'll receive another important document: the Closing Disclosure.

For most mortgages, you must receive it at least three business days before closing.

This shows your final loan terms and closing costs.

Compare it with your most recent Loan Estimate. If a fee changed significantly or you don't understand something, ask your lender or closing attorney about it before closing day.

Can the Seller Help Pay Your Closing Costs?

Sometimes.

You may be able to negotiate a seller credit, sometimes called a seller concession, in which the seller agrees to pay some of your closing costs.

How much the seller can contribute depends on your mortgage program and the terms of the transaction.

There's also an important tradeoff to understand.

A seller may agree to provide a closing-cost credit in exchange for a higher purchase price. That can reduce the amount of cash you need at closing, but it doesn't necessarily make the house less expensive. You may simply be financing more of the cost over time.

Can Down Payment Assistance Help?

Some homebuyer assistance programs can help eligible buyers with down payment and/or closing costs.

But don't assume assistance means you'll need no money of your own.

You may still need cash for expenses such as:

• Earnest money
• Home inspection
• Moving expenses
• Immediate repairs
• Costs your assistance program doesn't cover

The number you ultimately want to watch on your mortgage documents is Cash to Close. That's the estimated amount you'll actually need to bring to closing after your down payment, closing costs, deposits, seller credits, and other adjustments are considered.

Why This Matters

A buyer who saves only for the down payment can reach the end of the homebuying process and discover they need thousands more than expected.

Planning for closing costs early and understanding Georgia-specific expenses, seller credits, and available assistance gives you a realistic picture of how much money you'll need to bring to the closing table.

Sources: Georgia Department of Revenue, Consumer Financial Protection Bureau, My Home by Freddie Mac