Buying a home in New Jersey comes with many moving parts, and one that often catches buyers by surprise is closing costs. These are the fees and expenses you’ll pay at the end of your transaction, separate from your down payment.
Let’s break them down in plain language so you know exactly where your money is going when you close on your new home in the Garden State.
1. Escrow & Title Fees
Escrow and title fees protect both you and the seller during the homebuying process.
Title insurance ensures your ownership is clear, meaning no old liens, unpaid taxes, or ownership disputes can surface after closing. In New Jersey, buyers typically pay for the lender’s title insurance policy, while sellers often cover the owner’s policy, though this can vary depending on your agreement.
Escrow fees go to the neutral third party who handles the funds and paperwork until everything is finalized. You’ll also see notary and recording fees, which make your purchase legally binding and officially recorded with the county clerk.
Together, these costs ensure your transaction is protected from start to finish.
2. Prepaids & Impounds
These are expenses you’ll continue to pay as a homeowner, but some are collected upfront at closing.
This includes homeowner’s insurance, which protects your property, and property taxes, which in New Jersey can vary widely depending on the town or county. Since taxes here are billed quarterly, your lender may collect a few months in advance to set up your escrow account.
That escrow account is where your lender holds funds to pay insurance and taxes on your behalf, keeping everything on track and avoiding late payments.
Think of this category as the groundwork for stress-free homeownership.
3. Lender Fees
Lender fees are tied to processing and securing your loan.
You’ll usually see charges such as:
• Appraisal fee – confirms your home’s market value
• Credit report fee – verifies your financial history
• Origination charges – cover the lender’s administrative costs
While these fees can vary between banks and loan products, they all serve the same goal: to make sure your financing is accurate, fair, and ready to close on time.
It’s the behind-the-scenes work that makes your purchase possible.
Final Thoughts
Closing costs in New Jersey usually range from 2% to 5% of your purchase price, depending on the property, location, and loan type.
The key is preparation — reviewing your Loan Estimate (LE) and Closing Disclosure (CD) carefully so you’re never caught off guard.
Whether you’re buying your first home or your forever home, understanding these costs upfront helps you close with confidence and keep your budget in check.
In New Jersey, buyer closing costs typically fall between 2% and 5% of the purchase price. The exact percentage depends on:
- Property type and location (e.g., local transfer fees, attorney rates, and municipal inspections)
- Loan type (FHA, VA, conventional, etc.)
- Down payment amount (affects lender fees, mortgage insurance, and escrows)
- Purchase price (since some costs are fixed, smaller purchases tend to have higher percentages)
For example, a $600,000 purchase might have closing costs around $12,000–$30,000, with the lower end more common for cash deals and the higher end for financed ones with escrows and points.
Thinking about buying in Central New Jersey?
Contact The Blanchard Team at Berkshire Hathaway HomeServices Fox & Roach Realtors. We’ll walk you through every step and make sure your closing day goes as smoothly as your move-in day.
