How Much Are Closing Costs in Indiana 2024?

Buying a new home is an exciting and important decision, whether it’s your first home or your third. But before you dive too deep into shopping for new furniture or home décor, you’ll want to budget 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. To help prepare you for the final steps of the homebuying process, this Redfin article will break down how much closing costs are in Indiana, who pays for them, and what costs you can expect to pay as a buyer and as a seller.

How much are closing costs in Indiana?

In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. Closing costs in Indiana typically range from 2%-5% of the home’s purchase price. However, keep in mind that closing cost amounts vary depending on a few factors – such as the purchase price of the home, the type of loan, and any adjustments negotiated with the seller.

For example, if you’re buying a home in Bloomington, which has a median sale price of $302,500, closing costs could range anywhere from $6,050 to $15,125. Or, let’s say that you’re buying a home in Indianapolis, which has a median sale price of $250,000. Closing costs for a home here could be between $5,000 and $12,500.

Who pays closing costs in Indiana?

Usually both the buyer and the seller pay closing costs. But, each party’s closing costs amount will vary depending on what they are required to pay. Another thing to keep in mind is that buyers typically pay for closing costs out of pocket, while the seller’s closing cost payments are often deducted from the home sale proceeds.

Buyer closing costs in Indiana

For homebuyers in Indiana, you can expect to pay between 2%-5% of the home’s purchase price. In most cases, you’ll pay earnest money, typically 1% to 3% of the home price, upon reaching mutual acceptance in your home purchase. This deposit is subtracted from your closing costs, reducing the total amount due at closing. Let’s break down some of the common closing costs covered by the buyer:

• Appraisal fee: Home appraisals, which typically range from $300 to $500, are usually paid for separately at the time of the service. However, if not, you’ll need to pay for this at closing.
• 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: Some lenders charge a fee for creating your loan. As you shop around for lenders, inquire about what it covers and whether it’s negotiable to avoid high fees.
• Loan processing fee: Lenders may also charge a loan processing fee, covering underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible waivers.
• Loan discount points: If you buy discount points to lower your interest rate, you’ll pay a one-time fee at closing. These points can lower your rate by 0.25% to 0.5%, but consider your long-term homeownership plans before paying for a reduced rate.
• 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 fee paid as part of closing costs. Buyers typically cover both lender and owner title insurance policies.
• Homeowners insurance: In Indiana, your annual homeowner’s insurance premium may be part of your closing costs.
• Homeowners Association dues: If your property is part of a homeowners association, you’ll likely pay one month’s dues upfront at closing. These fees vary and contribute to maintenance and operational costs.
• Property taxes: As part of closing costs in Indiana, you may be required to prepay a portion of your property taxes at closing.

Seller closing costs in Indiana

The closing costs covered by sellers in Indiana can vary, but below are some of the common fees and costs that a seller pays 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: If the property is part of an HOA, the seller may need to pay a variety of fees. These can include HOA transfer fees, outstanding dues, and possibly a fee for obtaining HOA documents required by the buyer. The exact fees will depend on the HOA’s rules and regulations.
• 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 home’s sale price.

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