Ever look at a Loan Estimate and wonder why the numbers feel bigger than your down payment? You are not alone. Closing costs can be confusing, especially when you are buying in a specific market like Severna Park in Anne Arundel County. You want clarity, predictability, and a clean plan for cash to close. This guide explains what you will pay, how to estimate the final number, and smart ways to reduce it, with local tips for Anne Arundel County buyers. Let’s dive in.
What closing costs include
Closing costs are the one-time fees and prepaids required to complete your purchase and fund your loan. They appear on your Loan Estimate first, then your final Closing Disclosure.
Lender fees
These are charges from your mortgage lender. They commonly include application or origination fees, underwriting and processing, the appraisal, your credit report, and smaller verification items. Discount points, if you choose to buy down your rate, are optional and increase upfront costs in exchange for a lower monthly payment.
Title and settlement
Your title company or settlement agent handles the title search, closing logistics, and legal recording. Expect fees for the title search and exam, the closing or settlement fee, and title insurance. A lender’s title policy is typically required. An owner’s policy is often optional but recommended because it protects your ownership interest.
Taxes and recording in Anne Arundel County
Most Maryland purchases involve transfer taxes and recordation charges when the deed and mortgage are recorded. In Anne Arundel County, who pays what is often a matter of local custom and negotiation written into the contract. For current procedures and fees, review the Anne Arundel County Office of Finance resources and confirm specifics with your settlement agent. You can start with the county’s Office of Finance pages for recording and tax information and the Clerk of the Circuit Court for land records and recording requirements.
- Learn about county finance and recording on the Anne Arundel County Office of Finance site: Office of Finance
- Find recording requirements with the Clerk of the Circuit Court for Anne Arundel County
Prepaids and escrow setup
Prepaids are not fees but advance payments for items like daily mortgage interest from closing to month-end, your first year of homeowners insurance, and initial escrow deposits. If your lender escrows, you might fund 2 to 6 months of property taxes and several months of insurance at closing so the lender can pay those bills on time.
Prorations and HOA items
Closing statements prorate shared costs to the day of closing. You might receive a credit for property taxes the seller already paid that cover dates after you take ownership, or you might owe a portion if the bill is due soon. If the property has an HOA or condo association, expect document and transfer fees, plus prorations for dues.
Severna Park items to verify
Your total cash to close depends on a few local specifics. Plan to verify these early in your contract period.
Transfer and recordation taxes
Maryland and Anne Arundel County assess transfer and recordation charges when a deed is recorded. Rates and who pays can vary by local custom and contract negotiation. Confirm current rules and any exemptions with your title company and the county. Use the county’s finance pages and the Clerk of the Circuit Court for the latest recording guidance.
- County-level guidance: Anne Arundel County Office of Finance
- Recording process and documents: Clerk of the Circuit Court
Property taxes and billing cycle
Anne Arundel County bills real property taxes on a set schedule and prorates at closing based on the date you take ownership. Check your property’s assessment and billing timing so your prorations and escrow deposits are accurate. You can look up assessments and tax records using the Maryland Department of Assessments and Taxation Real Property Search and review county tax payment details on the Office of Finance site.
- Look up assessments with SDAT’s Real Property Search
- Learn how county tax bills work on the Anne Arundel County Real Property Tax page
HOA and condo fees
Many Severna Park homes are in community associations. Associations often charge for resale document packages, transfer fees, and account setup. Ask your agent to request timelines and costs up front so there are no surprises on your Closing Disclosure.
Document and recording requirements
Your settlement agent will prepare and record required documents. Anne Arundel County and Maryland have specific formatting and notarization rules, plus affidavits for transfer and recordation. Your title company will guide you, but you can reference the Clerk of the Circuit Court page for accepted formats and instructions.
Estimate your cash to close
You do not need a spreadsheet to get close. Use your lender’s Loan Estimate early, then the Closing Disclosure before settlement.
Use your Loan Estimate and Closing Disclosure
Lenders must send a Loan Estimate within three business days of application. Closer to settlement, you will receive a Closing Disclosure at least three business days before you sign. Compare them line by line. To understand the forms, review the CFPB’s guides for the Loan Estimate and the Closing Disclosure.
Step-by-step calculation
A simple way to forecast your cash to close:
- Start with your lender’s Estimated Cash to Close on the Loan Estimate. This is your baseline.
- List the moving parts:
- Down payment due at closing.
- Closing costs paid at closing. Exclude anything you already paid outside of closing, like an appraisal.
- Prepaids and initial escrow deposits for taxes and insurance.
- Prorations for county property taxes and any HOA dues.
- Credits from the seller or lender.
- Earnest money you already paid, which will be credited.
- Apply the formula:
- Cash to close = Down payment + Closing costs due at closing + Prepaids and escrow deposits + Buyer prorations and debits − Seller or lender credits − Earnest money already paid.
- Double-check timing items:
- First-year homeowners insurance premium.
- Daily interest from closing to the end of the month.
- Transfer and recording charges included by your title company.
Quick worksheet
Use this template with your lender and settlement agent:
- Purchase price:
- Loan amount:
- Earnest money paid (credit):
- Down payment due at closing:
- Total closing costs due at closing:
- Prepaid interest:
- Homeowners insurance premium due at closing:
- Initial escrow deposit for taxes and insurance:
- Property tax prorate (credit or debit):
- HOA/condo dues or transfer fees:
- Seller or lender credits:
- Final estimated cash to close:
Lower your cash to close
You can often reduce upfront cash with the right plan. Here are practical levers to use with your agent and lender.
Ask for seller concessions
You can request that the seller pay part of your closing costs as a credit at settlement. This is written into your offer and scaled to your loan program limits. If you are using a specialized loan type, ask your lender about maximum concession limits so you do not exceed program rules.
Compare rates and lender fees
Get Loan Estimates from two or three lenders to compare interest rates, discount points, and origination fees. You can also ask about a lender credit to offset costs. A credit typically raises your rate slightly, so weigh the monthly payment tradeoff against the upfront savings.
Shop title and settlement
You choose your title company. Settlement fees can vary, and some companies may bundle services differently. Ask for a detailed quote that includes title premiums, closing fees, and estimated recording charges.
Use homebuyer assistance
Maryland offers programs that can help with down payment and closing costs. Review the Maryland Mortgage Program for eligibility guidelines, benefits, and how assistance is delivered at closing. Confirm timelines early so funds are ready for your settlement date.
Timeline and checklist for buyers
Use this local checklist to stay on track from ratified contract to keys in hand.
As soon as your contract is ratified
- Order HOA or condo resale documents and confirm any transfer or estoppel fees.
- Deliver earnest money to the escrow holder and confirm receipt.
- Apply for your mortgage and request your Loan Estimate within three business days of application.
Three to six weeks before closing
- Schedule the appraisal and any inspections recommended for the property.
- Review your estimated cash to close with your lender and confirm how you will bring funds to settlement.
- Contact the title company to confirm acceptable payment methods, wiring instructions, and ID requirements.
Final week before closing
- Review your Closing Disclosure, which must be delivered at least three business days before closing.
- Ask your settlement agent to confirm county tax prorations and any HOA dues to be collected at closing.
- Secure your homeowners insurance binder and plan for the first-year premium.
Day of closing
- Bring a valid government-issued photo ID for all borrowers.
- Bring funds in the form requested by your title company. If wiring funds, call a verified phone number to confirm instructions.
- Sign documents, receive copies of your closing package, and keep your final Closing Disclosure for your records.
Wire safety and fraud prevention
Wire fraud is a real risk. Protect your funds by following these steps:
- Verify wire instructions by calling your title company at a known, trusted phone number. Do not rely on email alone.
- Confirm the recipient name and account number verbally before sending funds.
- If anything looks off, stop and call your settlement agent immediately.
Final thoughts for Severna Park buyers
Closing costs do not have to be a mystery. When you understand the categories, confirm county specifics, and compare options, you can plan your cash to close with confidence. If you are moving on a tight timeline or navigating a PCS, our team is built for precision and clear communication. We have your six from offer to keys.
Ready to map your exact cash to close and craft a strong offer strategy in Severna Park? Connect with The PCS Home Team. Make Your Move Easy — Schedule a Free Consultation.
FAQs
What are typical buyer closing costs in Severna Park?
- A common guideline is 2% to 5% of the purchase price for buyer closing costs, excluding your down payment. Always use your lender’s Loan Estimate for a precise figure.
Who pays transfer and recordation taxes in Anne Arundel County?
- Responsibility is negotiable and written into the contract. Local customs can vary. Confirm with your title company and reference the county’s Office of Finance resources.
How do I confirm my property tax proration for closing?
- Ask your settlement agent to show the calculation using county billing dates and your closing date. You can also check assessments via SDAT’s Real Property Search and county tax pages.
Can I roll closing costs into my mortgage?
- Some costs can be offset by lender credits or a higher-rate option, but many items like recording fees and initial escrow deposits must be paid at closing. Ask your lender to compare scenarios.
When will I get my final Closing Disclosure?
- Lenders must deliver your Closing Disclosure at least three business days before closing. Compare it to your Loan Estimate and ask about any changes right away.
Are there programs to help with closing costs in Maryland?
- Yes. The Maryland Mortgage Program offers assistance options for eligible buyers. Review the program site and speak with your lender about timelines and requirements.
