Understanding Closing Costs in Pennsylvania: A Complete Breakdown

What Are Closing Costs?

Closing costs are the fees and expenses you pay at the end of a real estate transaction, beyond the price of the property itself. In Pennsylvania, buyers can expect to pay between 2-5% of the purchase price in closing costs.

Common Closing Costs for PA Buyers

Lender Fees

Origination fee: 0.5-1% of loan amount

Appraisal fee: $400-$600

Credit report fee: $30-$50

Underwriting fee: $300-$600

Title & Escrow

Title search: $200-$400

Title insurance (owner's policy): Varies by purchase price

Title insurance (lender's policy): Required by lender

Settlement/closing fee: $500-$1,000

Government Fees

Recording fees: $100-$300

Transfer tax: 2% of purchase price (split 1% buyer/1% seller in most PA counties)

Philadelphia transfer tax: 3.278% total (highest in the state)

Prepaid Items

Homeowner's insurance: First year premium

Property taxes: Prorated from closing date

Prepaid interest: Per diem interest from closing to first payment

How to Reduce Closing Costs

1. Negotiate seller concessions: Ask the seller to contribute toward your closing costs (up to 3-6% depending on loan type)

2. Shop for title insurance: Prices vary between providers

3. Ask about lender credits: We can sometimes offer credits in exchange for a slightly higher rate

4. First-time buyer programs: PA offers various assistance programs

The Bottom Line

On a $300,000 home in Pennsylvania, expect roughly $6,000-$15,000 in total closing costs. The Taberne Group provides a detailed Loan Estimate early in the process so you know exactly what to expect.