Wondering how much cash you really need to close on a San Mateo home? Between lender fees, title charges, and prepaids, the line items can add up fast. You want a clear, all-in number well before you write an offer. In this guide, you’ll learn what closing costs include, who usually pays what in California and San Mateo, how to estimate your cash to close, and simple ways to avoid surprises. Let’s dive in.
What closing costs include
Closing costs are the fees and prepayments needed to finalize your purchase and fund your loan. In San Mateo, the major categories are similar to the rest of California, though dollar amounts can be higher due to local prices.
Loan fees and lender charges
These are charges from your lender and associated services:
- Origination or application fee. Often 0.5% to 1.5% of the loan amount, sometimes replaced by points or lender pricing.
- Discount points. Optional. One point equals 1% of the loan amount and can reduce your rate. Buy points only if the break-even makes sense for how long you expect to keep the loan.
- Underwriting, processing, and document fees. Commonly a few hundred dollars, often $300 to $1,000 combined.
- Rate-lock or lock extension fee. Charged by some lenders for longer lock periods.
- Credit report. Usually under $50.
- Appraisal. Most loans require it. In the Bay Area, typical single-family appraisals often run about $600 to $1,500 or more, depending on property type and complexity.
- Mortgage insurance. If you put less than 20% down on a conventional loan, private mortgage insurance (PMI) usually applies. Annual PMI often ranges from about 0.3% to 1.5% of the loan balance, depending on credit score and loan-to-value. FHA and VA have their own mandated structures.
Title and escrow services
Title and escrow companies handle the transfer and protect ownership and lender interests:
- Title insurance. Two policies exist: a lender’s policy and an owner’s policy. In California it is customary for the buyer to pay the lender’s policy, while the seller often pays the owner’s policy. This can vary by negotiation.
- Escrow or settlement fee. Paid to the escrow company for handling documents and funds. Often split between buyer and seller, and commonly ranges from a few hundred to around a thousand dollars or more depending on price and scale.
- Recording fees. County fees to record the deed and deed of trust. Usually modest, from tens to a few hundred dollars.
- Notary, courier, and wire fees. Small, transaction-specific charges.
Prepaids and impounds
These are funds you pay upfront for items that continue after closing:
- Prepaid interest. Interest from the day your loan funds to the end of that month. It varies with your rate and closing date.
- Property taxes. California’s base property tax is about 1% of assessed value, plus voter-approved rates and assessments. Taxes are prorated at closing. Many lenders collect an initial deposit into your escrow account, often around two months of taxes.
- Homeowners insurance. Lenders usually require your first-year premium paid at closing or collected in escrow, plus a small cushion.
- Mortgage insurance escrow. If PMI or mortgage insurance applies, lenders may collect initial deposits for future payments.
- HOA items. For condos or planned communities, you may prepay dues or reserves. HOA document or transfer fees can apply and may be allocated to buyer or seller by contract.
Inspections and due diligence
You choose which inspections to order, and costs depend on the property’s age and condition:
- General home inspection. Often about $300 to $800.
- Pest inspection. Common in California, typically about $100 to $300.
- Sewer scope, roof, chimney, foundation, or other specialty inspections. Ordered as needed.
- HOA documents. Associations or managers often charge about $150 to $400 to prepare resale packages. Who pays depends on the agreement.
Transfer taxes and assessments
- Documentary transfer tax. Counties and some cities charge transfer taxes based on the sale price. In many California transactions, the seller pays, but it is negotiable. Confirm current San Mateo County rates and whether the City of San Mateo imposes a separate city transfer tax at the time you buy.
- Special assessments or parcel taxes. If the property has local assessments, you will assume them, and they are prorated at closing.
Who usually pays what in San Mateo
Customs follow broader California practices, though everything is negotiable.
Common seller-paid items
- Owner’s title insurance policy (customary in many California markets)
- Documentary transfer tax (often paid by seller, subject to negotiation and local custom)
- A share of escrow fees, often split with the buyer
Common buyer-paid items
- Lender charges and third-party loan costs such as appraisal and credit report
- Lender’s title insurance policy
- Recording fees for the deed of trust
- Buyer’s share of escrow fees
- Prepaids and initial escrow deposits (insurance, taxes, prepaid interest)
- Inspections and due diligence costs
If you want help with cash to close, you can request a seller credit. Your loan program may cap seller concessions, so confirm limits with your lender.
How to estimate cash to close
You can sketch a solid estimate in minutes, then refine with official disclosures.
Quick 5-step method
- Start with your down payment. Purchase price minus your loan amount equals the down payment.
- Add buyer-paid closing costs. Include lender fees, lender’s title insurance, appraisal, your share of escrow, recording, and any transfer tax you agree to pay.
- Add prepaids and initial escrow deposits. Include the first year of homeowners insurance, prepaid interest, and initial escrow cushions for taxes and insurance.
- Subtract credits. Deduct any seller credits or lender credits.
- Verify with disclosures. Use your lender’s Loan Estimate early and the Closing Disclosure before signing to confirm final cash to close.
Percent-of-price rule of thumb
- Total buyer closing costs, excluding down payment, commonly run about 2% to 5% of the purchase price.
- Prepaids and initial escrow deposits alone often add 1% to 2%. In high-priced San Mateo transactions, these percentages translate into larger dollar amounts.
Sample San Mateo scenario
This example is for illustration only. Your numbers will vary with your lender, property type, and timing.
- Purchase price: $1,500,000
- Down payment: 20% ($300,000)
- Estimated buyer closing costs: 2.5% of price = $37,500
- Estimated prepaids and initial escrow: 1.2% of price = $18,000
- Estimated cash to close, excluding down payment: $37,500 + $18,000 = $55,500
- Total funds needed at closing: $300,000 + $55,500 = $355,500
Use this as a starting point and tighten the estimate once you have a Loan Estimate. Your Closing Disclosure, issued at least three business days before closing, will show the final, binding figure.
Timeline and required disclosures
- Loan Estimate. After you submit a complete loan application, your lender must provide a Loan Estimate within three business days. This shows projected closing costs and cash to close.
- Closing Disclosure. At least three business days before closing, you will receive a Closing Disclosure. Review it line by line and compare it to the Loan Estimate. Ask questions immediately if anything looks off.
- Title and escrow statements. Your escrow officer will prepare a settlement statement showing title premiums, escrow fees, recording charges, and how funds will flow at closing.
Tips to avoid surprises
- Shop early. Request Loan Estimates from multiple lenders to compare rates, points, and fees.
- Price title and escrow. Ask a local title company for a quick quote on title premiums and escrow charges.
- Build a cushion. Budget an extra 1% to 2% of the purchase price to cover unexpected items.
- Verify HOA costs. Confirm HOA transfer fees, reserves, and document charges early.
- Understand PMI. If you are putting less than 20% down, get a PMI quote and confirm how it affects your monthly payment and impounds.
- Follow safe wiring practices. Always verify wire instructions by phone with the escrow company to protect against fraud.
- Read every disclosure. Review your Closing Disclosure at least three days before signing and ask for clarifications on any line item.
How the Moussavian Real Estate Team helps
You should have a simple, accurate picture of your total cash to close before you make an offer. Our team pairs local market knowledge with a practical, numbers-first approach so you can plan with confidence. We coordinate with your lender for precise estimates, flag negotiable items, and help you weigh options like points, credits, and timing your close to minimize prepaid interest. If you are buying a condo or a home with an HOA, we help you identify potential HOA costs and document fees early.
Ready to build your personal closing cost plan for a San Mateo purchase? Reach out to the Moussavian Real Estate Team to start a tailored estimate and next steps.
FAQs
What are typical buyer closing costs in San Mateo?
- While amounts vary, many buyers see closing costs of about 2% to 5% of the purchase price, plus 1% to 2% for prepaids and initial escrow deposits.
Who usually pays title insurance in California?
- It is common for the seller to pay the owner’s policy and the buyer to pay the lender’s policy, though parties can negotiate this in the contract.
Do San Mateo buyers pay transfer taxes?
- In many California transactions, the seller pays documentary transfer taxes, but it is negotiable. Confirm current San Mateo County and City of San Mateo practices during your escrow.
How much is an appraisal in the Bay Area?
- Appraisals for single-family homes often run about $600 to $1,500 or more depending on property type and complexity.
What are prepaids and impounds for a new mortgage?
- These are upfront payments for items like prepaid interest, the first year of homeowners insurance, and initial deposits into your escrow account for property taxes and insurance.
When will I know my final cash to close?
- Your lender must issue a Closing Disclosure at least three business days before closing. That document shows your final, binding cash to close amount.
Can I negotiate a seller credit toward my closing costs?
- Yes. Seller credits are common and can reduce your cash to close, but your loan program may cap allowable concessions, so confirm limits with your lender.
