Clearing Up Closing Costs Confusion

You qualify and have been approved for a mortgage and you are excited to be on your way to owning a piece of Kauai real estate. You search the homes for sale and finally find “the one.” You’ve been setting aside money to cover the down payment on the house and feel you are ready to take the plunge into home ownership, only to be blindsided by the additional amount of money you need in closing costs.

What are closing costs? These are charges related to the purchase of real estate that are aside from the sales price of the property. Saving for your down payment and qualifying for a mortgage is only part of the financial responsibility of becoming a homeowner. There are a number of closing costs you as a buyer will be responsible for before receiving the keys to your new home.

Some of the charges that might appear in closing costs include:

  • Loan application fees
  • Credit reporting fees
  • Title search and title insurance
  • Appraisal
  • Legal fees
  • Private mortgage insurance
  • Inspections
  • Taxes and document stamps
  • Points and origination fees
  • Escrow fees

The good news is that your lender and real estate agent will provide a Good Faith Estimate of your expected settlement costs to give you an idea of what you will need to pay at the time of closing. You should anticipate to pay between 2 and 7 percent of the total amount of money borrowed to cover your closing costs.

Visit our Kauai real estate Facebook business page at for today’s tip on settlement costs and ways to avoid unwanted surprises during the closing process on your new home. Learning what to expect can help ease your stress when heading down the home stretch to becoming a homeowner.

Erin Koshi (RA) is a Kauai real estate agent at Taba Realty & Development, LLC in Koloa. The company specializes in Kauai real estate, whether residential and commercial sales, residential and commercial property management, development services or consulting. You may contact Erin at

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