Buying in East Ridge and trying to figure out what you will actually pay at the closing table? You are not alone. Closing costs can feel confusing, especially when you are juggling loan quotes, inspections, and timing. This guide breaks down what buyers typically pay in East Ridge, where the money goes, how much to budget, and smart ways to reduce your out-of-pocket costs. Let’s dive in.
What closing costs cover
Closing costs are the fees and prepaid items you pay to finalize a home purchase. They sit on top of the purchase price and down payment. You will see lender charges, third-party services, government recording fees, and prepaids like insurance and property taxes.
In our market, who pays what is negotiated in the contract. Buyers usually cover loan-related fees, appraisal, lender’s title policy, mortgage recording, and prepaids. Sellers typically cover broker commissions and often the owner’s title policy, though that can be split. Seller credits toward your costs are also common when market conditions allow.
What buyers typically pay in East Ridge
Loan-related fees
- Loan origination or processing fee, often 0.25% to 1.0% of the loan amount
- Underwriting and processing, commonly $300 to $1,200
- Credit report, about $25 to $50
- Appraisal, usually $400 to $800 for a typical single-family home
- Flood determination, survey review, or escrow review, $50 to $500 depending on scope
- Discount points if you choose to buy down your rate, 0 to 3 points or more (1 point equals 1% of your loan)
Title and settlement fees
- Title search and exam plus title insurance premiums. Your lender will require a lender’s policy. An owner’s policy is optional but many buyers purchase it for added protection. Premiums are one-time and depend on price and state rate schedules.
- Settlement or closing fee, often $300 to $800
- Document preparation or attorney fee if applicable, often $200 to $800 or more
Government and recording fees
- Deed and mortgage recording fees are set by Hamilton County and charged per document and page. Buyers typically pay to record the mortgage; deed recording is often a seller item, but it can be negotiated.
- Tennessee transfer or documentary taxes should be confirmed with the Tennessee Department of Revenue and the Hamilton County Register of Deeds. Your settlement agent will calculate any amounts that apply to your transaction.
Prepaids and escrows
- First year homeowner’s insurance premium, often collected at closing
- Property tax proration based on your closing date and the local tax calendar
- Initial escrow deposits for taxes and insurance, commonly 2 to 6 months depending on the lender’s requirements
- HOA dues and any move-in fees if the community has an association
Other possible charges
- Home inspection, typically $300 to $600, paid before closing
- Pest or termite inspection if required, about $50 to $200
- Survey or elevation certificate if required, often $300 to $1,000 or more
- Wire or cashier’s check fees, about $10 to $50. Always confirm wiring instructions by phone with your closing agent to avoid fraud.
How much to budget
Quick rule of thumb
For financed purchases, a reasonable estimate is 2% to 5% of the purchase price for closing costs, not counting your down payment. Cash buyers usually pay less because there are no loan fees, often 0.5% to 1.5% depending on title, recording fees, and any taxes.
Actual numbers vary with loan type, whether you pay points to lower your rate, title premiums, and how much the seller contributes.
Sample estimates by price
These illustrations show typical ranges for financed buyers. Your lender and settlement agent will provide exact figures.
- $250,000 purchase: about $5,000 to $12,500
- $350,000 purchase: about $7,000 to $17,500
- $450,000 purchase: about $9,000 to $22,500
These ranges include loan fees, title and settlement, and prepaids or escrows. Your down payment is separate.
Tennessee and Hamilton County notes
Recording and transfer charges
Hamilton County’s Register of Deeds records deeds and mortgages. Recording fees are typically a base charge plus per-page amounts. Any state-level documentary or transfer tax is set by Tennessee law. Your settlement agent will use the county’s fee schedule and the Tennessee Department of Revenue rules to calculate exact charges for your file. If you want to preview numbers, ask your title company for a quote before you finalize your contract.
Property taxes and proration
Property taxes are prorated based on the closing date and the local tax calendar. The Hamilton County Trustee and the Assessor of Property maintain rates, billing dates, and payment schedules. At closing, you may reimburse the seller for the portion of the year you will own the home, and your lender may collect several months of tax escrow.
Who handles your closing
In Tennessee, closings are commonly handled by title companies or attorneys. The settlement agent will coordinate the title search, collect and disburse funds, and record your documents with the county. If you are financing, your lender will issue a Closing Disclosure at least three business days before closing so you can review the final numbers.
Loan programs and seller credits
Seller credits can offset a big portion of your costs. Program rules cap how much the seller can contribute.
Conventional loans
Conventional loans limit seller concessions based on your down payment and loan-to-value ratio. Typical caps range from about 3% to 9% of the purchase price. Your lender can confirm the current limit for your scenario.
FHA loans
FHA allows seller concessions up to 6% of the sales price for common buyer costs, prepaid items, and discount points, subject to current guidance.
VA loans
VA loans allow certain seller-paid costs and concessions. A common rule of thumb is up to 4% for typical concession items, with additional limits on which fees a veteran can or cannot pay. Your lender will apply the latest VA rules to your loan.
USDA and assistance programs
USDA loans include specific guarantee fees and rules for concessions. In addition, the Tennessee Housing Development Agency (THDA) offers down payment and closing cost assistance for eligible buyers. These programs change over time and have income and loan limits, so check eligibility early in your home search.
Ways to lower your costs
- Ask for a seller credit. If the market supports it, negotiate a credit toward your costs in the contract.
- Shop your mortgage. Apply with more than one lender and compare Loan Estimates line by line, including rate, points, and fees.
- Evaluate discount points. Only pay points if the break-even timeline fits your plans.
- Compare title quotes. Title insurance rates may follow state schedules, but settlement and ancillary fees can vary.
- Use assistance programs. Explore THDA or local grants as early as possible so your offer reflects the right terms.
- Negotiate credits vs. repairs. A closing credit can be simpler than repair work before closing, especially with tight timelines.
- Review your Closing Disclosure carefully. You must receive it at least three business days before closing. Question any charge that is not clear.
Your closing timeline
From contract to keys
- After you sign a contract, apply for your mortgage. Your lender will issue a Loan Estimate within three business days.
- Appraisal, inspections, and title search are ordered and completed.
- You receive your Closing Disclosure at least three business days before closing if you have a loan.
- Plan a final walkthrough 24 to 48 hours before closing.
Day-of closing checklist
- Bring a government-issued ID for each signer
- Bring certified funds or wire per confirmed instructions
- Provide your homeowner’s insurance binder naming the lender as mortgagee
- Review and bring your finalized Closing Disclosure or settlement statement
- Confirm how and when you will get keys and garage remotes
Wire safety
Wire fraud is a real risk in real estate. Only use wiring instructions from your closing attorney or title company, and always confirm them by phone using a number you know is correct. Do not rely on email alone.
New construction notes in East Ridge
If you are buying new construction or building a custom home, your closing cost categories are similar, but timing and credits may differ.
- Builder incentives. Builders sometimes offer credits that can cover a portion of your closing costs. Structure these in your contract and within your loan program limits.
- Appraisal and inspections. New homes still require an appraisal, and some buyers order third-party inspections during phases of construction.
- Final numbers. Your title company will coordinate with the builder on final lien waivers and any outstanding items before you close.
A team that works closely with builders can help you plan these steps and negotiate incentives that keep your cash at closing manageable.
Ready to map your numbers?
Every buyer’s cost structure is unique. Your loan type, insurance, timing, and any seller concessions will drive your final figure. If you want a clear estimate for an East Ridge address you love, ask for a sample Settlement Statement and compare it with your Loan Estimate. We are happy to walk you through each line and help you negotiate the best outcome for your budget.
When you are ready, reach out to Jooma Homes for a personalized cost breakdown and strategy session tailored to East Ridge and Greater Chattanooga.
FAQs
Who pays transfer taxes in Tennessee for East Ridge purchases?
- It depends on Tennessee law, Hamilton County customs, and your contract. Confirm any state transfer or documentary taxes with the Tennessee Department of Revenue and the Hamilton County Register of Deeds, then decide in negotiations who covers them.
Can a seller in East Ridge pay my closing costs?
- Yes. Seller credits are common and allowed up to your loan program’s limits. Conventional loans cap credits by down payment, FHA typically allows up to 6%, and VA commonly allows up to 4% in concessions with additional fee rules.
Is owner’s title insurance required for East Ridge buyers?
- No. Your lender will require a lender’s policy if you finance, but an owner’s policy is optional. Many buyers purchase it to protect their equity.
How are Hamilton County property taxes prorated at closing?
- Taxes are prorated based on your closing date and the local billing calendar. The title company uses Hamilton County’s rates and schedules so each party pays its share.
What do cash buyers typically pay in closing costs in East Ridge?
- Cash buyers avoid loan fees, so costs are usually lower, often about 0.5% to 1.5% of the price depending on title, recording, and any applicable taxes or assessments.
