Buying in Edgewater should feel exciting, not confusing. Yet for many buyers, the phrase “closing costs” raises more questions than answers. You want to know what you’ll pay, who pays what in Anne Arundel County, and how to plan your budget before you fall in love with a home. You’re in the right place.
This guide explains what closing costs include, common local practices in Maryland, how to estimate your total before touring, and where to confirm the latest numbers. You’ll leave with a clear, practical plan to move forward with confidence. Let’s dive in.
What closing costs cover
Closing costs are the one-time expenses you pay at settlement in addition to your down payment. They include lender fees, title and settlement charges, government taxes and recording fees, and prepaid items like interest and insurance.
Loan and lender fees
These are charged by your mortgage lender and are typically paid by you as the buyer.
- Loan origination: often 0.5% to 1.5% of the loan amount.
- Underwriting and processing: commonly $400 to $1,200 combined.
- Credit report: usually $25 to $60.
- Appraisal: typically $400 to $800, higher for complex properties.
- Rate-lock fee: may apply if you lock your rate for an extended period.
- Mortgage insurance: upfront charges can apply depending on your loan program.
Title and settlement costs
A title and settlement provider handles the title search, closing, and issuance of title insurance.
- Lender’s title insurance policy: required when you have a mortgage; cost scales with your loan amount.
- Owner’s title insurance policy: protects your ownership. In many Maryland transactions the seller often pays this by local custom, but it is negotiable.
- Title search, settlement, and document prep: commonly $300 to $800 combined, depending on provider and complexity.
- Settlement handling and recording service fees: vary by provider.
Government taxes and recording fees
These include state and county charges when the deed and mortgage are recorded.
- Transfer and recordation taxes: assessed by Maryland and Anne Arundel County. Amounts and who pays can vary and are often negotiable.
- Deed recording fees: flat fees to record documents, typically modest.
- Mortgage recordation taxes: may apply when recording your new loan.
Prepaids and escrow
These are not fees for services but advance payments to set up your loan and homeownership.
- Prepaid interest: covers interest from your closing date to month-end.
- Homeowner’s insurance: often the first year’s premium is paid at closing.
- Property taxes and escrow reserves: buyers often prepay a prorated share and fund 2 to 3 months of reserves for taxes and insurance.
- HOA items: prorations or transfer fees if the home is in an association.
Pre-closing inspections and checks
These are typically paid out of pocket before settlement and are not always shown on the final statement, but they affect your overall budget.
- Home inspection: $300 to $600.
- Pest/termite, septic, or well inspections as applicable: $50 to $400 or more depending on scope.
- Survey if required: $300 to $800 or more.
Who usually pays what in Anne Arundel County
Every purchase is unique, and your contract can shift costs between parties. That said, here are common practices in Maryland and Anne Arundel County transactions:
- Seller typically pays: real estate broker commissions, and often the owner’s title insurance premium. Sellers may also offer concessions if negotiated.
- Buyer typically pays: lender-related fees, the lender’s title insurance policy, prepaid interest, the first year of homeowners insurance, escrow deposits for taxes and insurance, and loan recording fees. Buyers also pay for inspections and surveys.
- Transfer and recordation taxes: both the responsibility and the exact rates vary by jurisdiction and can be guided by local custom or negotiation. Confirm current practices and amounts for your specific property and contract.
The key takeaway: several items are negotiable. Your offer strategy can align who pays what with your broader budget and goals.
Transfer and recordation taxes in Maryland
Maryland and its counties assess taxes when a deed is transferred and when a mortgage is recorded. In Anne Arundel County, these charges can be a meaningful portion of closing costs. Customs vary on how the total is split between buyer and seller, and exact rates can change.
For your specific transaction, confirm:
- Current state and county transfer and recordation tax rates.
- Standard local allocation between buyer and seller for your property type.
- Any applicable exemptions or special rules.
You can verify details with Anne Arundel County’s Office of Finance or Recorder, statewide resources such as the Maryland Department of Assessments and Taxation and the Maryland Comptroller, a local title company, and your lender’s required disclosures.
How to estimate your budget before touring
You do not need final numbers to set a smart budget. Use this simple method to get close, then refine as you move forward.
Step 1: Gather base numbers
- Target purchase price (P).
- Down payment percent (D%), which gives your loan amount: P × (1 − D%).
- Expected interest rate and loan program.
Step 2: Apply typical ranges
- Lender fees and prepaids: about 1.0% to 2.5% of purchase price.
- Title, settlement, and recording (including lender’s title policy): about 0.3% to 1.0% of purchase price.
- Government transfer and recordation taxes: verify separately for Maryland and Anne Arundel County.
- Inspections and survey: typically $500 to $2,000+.
Step 3: Use a quick formula
Estimated buyer closing costs, excluding down payment, can be approximated as:
- Closing costs ≈ (P × 1.0% to 3.5%) + inspections/surveys ($500 to $2,000) + verified transfer/recordation taxes for your property.
If you, rather than the seller, pay the owner’s title policy, add roughly 0.25% to 0.5% of the purchase price to your side.
Step 4: Illustrative examples
These scenarios assume the seller pays the owner’s title policy, which is common in many Maryland transactions. Taxes and escrow deposits are not included and should be verified.
$350,000 purchase price
- Lender and prepaids (1.5%): $5,250
- Title and settlement (0.5%): $1,750
- Inspections/survey: $800
- Estimated closing costs: about $7,800 to $9,800 plus taxes and escrow deposits.
$550,000 purchase price
- Lender and prepaids (1.5%): $8,250
- Title and settlement (0.5%): $2,750
- Inspections/survey: $1,000
- Estimated closing costs: about $11,000 to $13,000 plus taxes and escrow deposits.
$850,000 purchase price
- Lender and prepaids (1.5%): $12,750
- Title and settlement (0.5%): $4,250
- Inspections/survey: $1,200
- Estimated closing costs: about $18,000 to $21,000 plus taxes and escrow deposits.
These are examples only. Your Loan Estimate and your title company’s sample settlement statement will provide the most accurate figures.
Quick budgeting checklist
- Confirm your price range and down payment.
- Ask your lender for a Loan Estimate early.
- Request a sample closing statement from a local title company for your price point.
- Verify transfer and recordation taxes for Anne Arundel County and how they are typically split.
- Add a cushion of $500 to $1,500 for prorations and last-minute adjustments.
Edgewater buyer tips: local considerations
Edgewater offers Chesapeake Bay living, with many homes near water or on larger lots. As you plan your closing costs and due diligence, consider:
- Flood zone review if the property is near waterways. Insurance requirements can affect your budget.
- Septic and well inspections for homes not on municipal services.
- HOA or community association dues and any transfer fees.
Build these into your plan early so there are no surprises later.
How to get exact numbers at the right time
Your goal is clarity before you make an offer. Here is a practical sequence that works well for Anne Arundel County buyers:
- Secure prequalification and request a formal Loan Estimate from your lender once you apply. This must be provided within three business days and itemizes your expected closing costs.
- Contact a local title or settlement company and request a sample closing statement based on your target price, loan amount, and Edgewater location.
- Confirm current Maryland and Anne Arundel County transfer and recordation tax rates and how they are commonly allocated in your type of purchase.
- Update your estimate as you narrow down properties, then refine again when your offer is accepted and you receive the Closing Disclosure.
The bottom line for Edgewater homebuyers
When you understand the components, closing costs become predictable. In Edgewater and greater Anne Arundel County, plan for about 2% to 5% of the purchase price in buyer closing costs, plus inspections, with transfer and recordation taxes verified separately and negotiated as part of your contract. Use your lender’s disclosures and a local title company’s sample statements to dial in the numbers well before you write an offer.
If you want a clear, step-by-step plan tailored to your price point and neighborhood, reach out to Greg Beckman for local guidance and an organized path to the closing table.
FAQs
How much should a first-time Edgewater buyer budget for closing costs?
- Plan for about 2% to 5% of the purchase price for buyer closing costs, plus inspections, and verify Maryland and Anne Arundel County transfer and recordation taxes separately.
In Anne Arundel County, who typically pays transfer and recordation taxes?
- Responsibility varies by jurisdiction and negotiation; confirm current Maryland and county rates and the common local split with a title company or your agent.
Will the seller pay my owner’s title insurance policy in Maryland?
- In many Maryland transactions the seller often pays the owner’s title policy by local custom, but this is negotiable and should be confirmed for your specific contract.
How can I get an exact closing-cost estimate before making an offer?
- Ask your lender for a Loan Estimate and request a sample closing statement from a local title company for your target price; your agent can share recent local cost splits.
What pre-closing costs should I expect to pay out of pocket?
- Budget for inspections and possible surveys, commonly $500 to $2,000+ total, paid before closing and separate from settlement figures.
