Step 41 of 48 Phase 5: Prepare for Closing
5.7 Arrange To Pay Closing Costs
You will need to bring funds to closing for your down payment and closing costs. Understand how to transfer money safely to avoid wire fraud scams.
Typical Closing Cost Breakdown
| Category | Typical Cost | Notes |
|---|---|---|
| Loan Origination | 0.5-1% of loan | Lender processing fee |
| Appraisal | $300-$700 | May be paid earlier |
| Title Insurance | $1,000-$2,500 | Lender and owner policies |
| Attorney/Escrow | $500-$1,500 | Varies by state |
| Recording Fees | $50-$250 | Government fees |
| Prepaid Interest | Varies | Per diem from closing to month end |
| Escrow Reserves | 2-6 months | Taxes and insurance |
Wire Fraud Protection
- NEVER trust wire instructions sent by email alone
- Call the title company at a known number to verify instructions
- Do not use phone numbers from the email - look them up independently
- Wire fraud is the most common real estate scam - criminals hack emails
- Once money is wired to scammers, it is usually gone forever
Pro Tips
- Wire transfer is preferred over cashier's check for large amounts
- Initiate the wire 1-2 days early to ensure it arrives on time
- Get exact wire amount from your Closing Disclosure
- Keep wire confirmation for your records
- Ask your bank about their wire fraud protections
Real-World Example
Rachel's Story: Rachel received wire instructions by email for her $15,000 closing funds. Something felt off - here is what happened.
- She received an email that appeared to be from her title company with wire instructions
- The email address was slightly different: closing@titleco-secure.com instead of closing@titleco.com
- The email urged her to wire immediately to avoid closing delays
- Rachel remembered her agent's warning about wire fraud and paused
- She called the title company at the number on their website (not the email)
- The title company confirmed the email was fraudulent - a scammer had been monitoring their email chain
Outcome: By independently verifying the wire instructions with a phone call, Rachel avoided losing $15,000 to wire fraud. Always call to verify using a known phone number - never trust wire instructions sent only by email.