Buying in Nazareth and wondering how much cash you will need beyond your down payment? You are not alone. Closing costs in Pennsylvania include a mix of fees, taxes, and prepaids that can feel confusing at first. This guide breaks down what you will likely pay in Nazareth, how Pennsylvania’s transfer tax works, and simple steps to estimate your total. Let’s dive in.
What closing costs cover
Closing costs are the one-time fees, third-party charges, and prepaid items that finalize your purchase and mortgage. They are separate from your down payment.
Typical items include:
- Lender fees and appraisal
- Title insurance, settlement, and recording
- Home inspection and other inspections
- Prepaid interest, homeowners insurance, and property tax escrows
As a planning rule, buyers often see total closing costs around 2% to 5% of the purchase price, not counting the down payment. Your exact figure depends on your loan type, taxes, and whether the seller covers any items. Your lender will give you a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before settlement with your final numbers.
Pennsylvania transfer tax and local customs
Pennsylvania charges a realty transfer tax when a property changes hands. In many areas, the combined rate is about 2% of the sale price. Local add-ons and exemptions can vary by municipality and county, so you should confirm the exact rate for Nazareth and Northampton County with a title company or the county.
Who usually pays in Nazareth
Who pays the transfer tax is set by the contract and local custom. In many Pennsylvania markets, including parts of the Lehigh Valley, sellers commonly pay the realty transfer tax and often provide the owner’s title policy. This is negotiable. Always verify what is customary for the specific Nazareth property with your agent and the settlement company.
Typical buyer costs in Nazareth
Use these ranges for planning. Actual figures depend on your lender, loan program, property, and timing.
Mortgage and lender fees
- Origination and processing: a few hundred dollars up to about 1% of the loan amount
- Underwriting and credit report: roughly $25 to $1,000 combined
- Discount points: optional, usually 1 point equals 1% of the loan amount
- Appraisal: about $400 to $700 in the Lehigh Valley
- Mortgage insurance: varies by program if you put less than 20% down
Title, settlement, and recording
- Lender’s title policy: often about 0.2% to 0.8% of the loan amount
- Owner’s title policy: based on purchase price, sometimes paid by the seller in Pennsylvania
- Settlement or closing fee: about $300 to $800
- Title search and exam: about $75 to $300
- Recording fees: county-set charges, often from the tens to low hundreds
Inspections and third-party services
- Home inspection: about $300 to $600
- Pest or wood-destroying insect inspection: about $75 to $200
- Survey if required: about $300 to $900
- Flood certification: about $12 to $25
Prepaids and escrow reserves
- Prepaid interest: from your closing date to the end of the month
- Homeowners insurance: often the first year due at closing, commonly $600 to $2,000 or more based on coverage
- Property tax escrow: lenders often collect 2 to 6 months of taxes and insurance upfront
- HOA fees: some communities charge transfer fees or collect a few months of dues upfront
Title or attorney closings
Most Pennsylvania purchases close with a title or settlement company. Some buyers involve an attorney. Fee structures differ, so ask your settlement provider for a line-item estimate early.
How much to budget: Nazareth examples
These planning scenarios show how the transfer tax affects your cash to close. Figures exclude your down payment.
Assumptions for illustration:
- Combined transfer tax shown as 2% of price. Confirm actual Nazareth rate.
- Buyer closing-cost baseline, excluding transfer tax but including lender, title, and prepaids: about 2.0% to 3.5% of the price.
- Appraisal and inspection added on top.
Example A - Starter home at $300,000
- Scenario 1 - Seller pays transfer tax and owner’s title policy:
- Buyer closing costs at 2.5%: $7,500
- Appraisal: $550
- Inspection: $400
- Prepaids and escrow: $1,500
- Total estimated cash to close: about $9,950, roughly 3.3% of price
- Scenario 2 - Buyer pays transfer tax:
- Add transfer tax at 2%: $6,000
- Total estimated cash to close: about $15,950, roughly 5.3% of price
Example B - Move-up home at $450,000
- Scenario 1 - Seller pays transfer tax:
- Buyer closing costs at 2.5%: $11,250
- Appraisal: $550
- Inspection: $450
- Prepaids and escrow: $2,250
- Total estimated cash to close: about $14,500, roughly 3.2% of price
- Scenario 2 - Buyer pays transfer tax:
- Add transfer tax at 2%: $9,000
- Total estimated cash to close: about $23,500, roughly 5.2% of price
These examples are for planning only. Your loan program, escrow requirements, and any seller credits will change the totals. Rely on your Loan Estimate and final Closing Disclosure for exact figures.
Ways to reduce your costs
- Ask for seller credits. Seller-paid closing costs are common in some situations. Loan programs set limits, so check with your lender.
- Compare at least three lenders. Rates and fees vary. Reviewing multiple Loan Estimates can save you money.
- Consider how to structure costs. Some items can be financed or offset by a lender credit, but this can increase your monthly payment.
- Keep needed protections. Skip optional add-ons only after verifying value. A full home inspection is still wise.
- Use local settlement experts. Local title companies can confirm county recording fees and speed up accurate estimates.
Your step-by-step estimate checklist
- Confirm who pays the transfer tax and owner’s title policy on the specific Nazareth listing. Put this in your offer terms.
- Request Loan Estimates from 2 to 3 local lenders based on your target price and down payment.
- Ask a Northampton County title or settlement company for a detailed fee quote, including recording charges.
- Add third-party items like appraisal, inspections, and any survey.
- Budget a $500 to $2,000 cushion for final adjustments on the Closing Disclosure.
- Get fully preapproved so your Loan Estimate reflects your actual documents.
- Confirm wire instructions directly with the settlement company just before sending funds to avoid fraud.
Final thoughts and next steps
Closing costs in Pennsylvania are manageable when you know what to expect. If you confirm who pays the transfer tax, compare lender quotes, and get a solid title estimate, you will have a clear picture of your cash to close for a Nazareth purchase. If you are early in your search, preapproval and a quick conversation with a local settlement company will give you real numbers within a day or two.
Have questions about your exact situation or a specific Nazareth property? Reach out to John Dally for a local walkthrough of your closing costs and a game plan that fits your goals.
FAQs
Who pays the Pennsylvania realty transfer tax in Nazareth?
- It depends on the contract and custom; in many Lehigh Valley deals the seller commonly pays, but it is negotiable, so verify terms with your agent and settlement company.
How much should a Nazareth buyer save for closing?
- Plan for about 2% to 5% of the purchase price for closing costs, then adjust based on who pays the transfer tax and your loan program.
Can I roll closing costs into my mortgage in Pennsylvania?
- Some costs can be financed or offset with lender credits, but this can raise your loan amount and monthly payment; confirm options with your lender.
When do I get my final closing cost figure in Pennsylvania?
- You receive a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before settlement with the final amounts.
