How Much Are Closing Costs in Maine 2024?

Buying a new home is an exciting and big decision, whether it’s your first home or your third. But before you dive too deep into buying new appliances or home décor, you’ll want to consider how much you’ll need to pay for closing costs.

Closing costs are the final expenses that need to be paid in order to close on a real estate transaction, such as taxes, lender fees, and title insurance. If you’re feeling unprepared or overwhelmed, don’t worry. To help you budget for closing costs, this Redfin article will cover how much closing costs are in Maine, who pays for them, and which costs you can expect to pay as a buyer and as a seller.

How much are closing costs on average in Maine?

In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. As a general rule of thumb, you can expect closing costs in Maine to add up between 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on a number of factors, such as the buyer’s loan program or negotiations made with the seller.

Let’s say you’re buying a home in Portland, where the median home sale price is $623,000. Based on this, you could expect closing costs to be between $12,460 and $31,150. Whereas if you’re buying a home in Yarmouth, which has a median sale price of $750,000, closing costs could be anywhere from $15,000 to $37,500.

Who pays closing costs in Maine?

In most areas, including Maine, both the buyer and the seller will pay closing costs. But the buyer and seller will pay for different closing costs and likely have different total closing cost amounts. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are deducted from the home sale proceeds.

Buyer closing costs in Maine

For homebuyers in Maine, you can expect to pay between 2%-5% of the purchase price. If you paid earnest money, this amount will be subtracted from your closing costs, which will reduce the total amount you owe at closing. Earnest money is typically between 1%-3% of the home’s price. Here are a few common closing costs that buyers typically cover:

• Appraisal fee: Your mortgage lender will require a home appraisal to ensure the home value is equal to or more than the loan amount. Home appraisals typically cost between $300 and $500, depending on location. If you pay at the time of service, it will not be included in your closing costs.
• Inspection fee: Home inspections generally range from $300 to $500 – they can vary based on local rates and the property’s specific characteristics. If you don’t pay for the inspection at the time of service, this will need to be paid at closing.
• Loan origination fee: Most lenders charge a fee for creating your loan. Be sure to check with your lender what this fee covers and if it can be waived or negotiated.
• Loan processing fee: In addition to the origination fee, your lender may also charge a fee for processing your loan. This typically covers underwriting and related services. It’s recommended to discuss this fee with your lender to understand what this fee covers and if it can be waived.
• Loan discount points: If you’ve purchased points to lower your interest rate, you’ll usually pay a one-time fee at closing. Each point can lower your rate by 0.25% to 0.5%. Consider your long-term plans, such as how long you plan to own the home or if you plan to re-finance, before purchasing points.
• Private mortgage insurance (PMI): Required for down payments under 20%, PMI might involve an upfront fee at closing, depending on the loan type. It’s usually part of your monthly payment, but some loans offer the option to pay it as a one-time fee.
• Title insurance: Title insurance is a one-time closing cost, with buyers commonly paying for both lender and owner policies.
• Homeowners insurance: Your annual homeowners insurance premium may be included in your closing costs in Maine.
• Homeowners Association dues: For homes in HOA-managed communities, you might have to pay one month’s dues at closing, which can vary depending on the property and covers maintenance and operational expenses.
• Property taxes: Buyers may have to prepay property taxes as part of their closing costs in Maine.

Seller closing costs in Maine

The closing costs covered by sellers in Maine can vary, but here are a few common closing costs that sellers pay for:

• Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with their agent.
• Homeowners Association fees: Sellers are generally responsible for settling any outstanding HOA fees or assessments up to the closing date, and they may need to provide HOA documents to the buyer as part of the sale.
• Property taxes: Any outstanding property taxes will be due at this time. However, if the seller has prepaid property taxes for the period that extends beyond the closing date, they may be credited back for the portion they’ve paid but won’t use.
• Title insurance: Sellers typically cover the cost of the buyer’s owner’s title insurance policy. This policy protects the buyer from any potential title issues that may arise after the property is sold. The cost of title insurance can vary but is generally based on the property’s sale price.
• Transfer taxes: Depending on the location and local regulations, sellers in Maine may be responsible for paying state transfer taxes as well as potential local transfer taxes. Transfer taxes are typically based on the property’s sale price and are collected when ownership of the property is transferred from the seller to the buyer.

Median home sale price data from the Redfin Data Center during July 2024.