If you’re buying a home in Vernon Hills, the last thing you want is a surprise at the closing table. You work hard to budget for your down payment, and it helps to know what else you’ll pay and why. In this guide, you’ll see typical closing cost ranges, what each fee covers, local Illinois and Lake County specifics, and smart ways to save. Let’s dive in.
What closing costs include
Closing costs are the fees, taxes, and prepaid items you pay in addition to the purchase price. If you use a mortgage, you’ll typically budget about 2% to 5% of the purchase price for closing costs. If you pay cash, you can expect fewer line items, often 0.5% to 2%, depending on title, recording, inspections, and prorations.
Your lender must give you a Loan Estimate within three business days of applying and a Closing Disclosure at least three business days before you sign. These documents itemize the costs so you can review and ask questions ahead of time.
Vernon Hills cost breakdown
Loan-related fees
- Origination or lender fee: Often 0.25% to 1.0% of the loan amount.
- Underwriting and processing: Typically $400 to $1,200 combined.
- Appraisal: Usually required; plan for $400 to $800 for many single-family homes in northern Illinois.
- Credit report: About $25 to $75.
- Flood certification: About $10 to $30.
- Discount points (optional): Each point is 1% of the loan amount to lower your interest rate.
- Mortgage insurance (if applicable): Upfront and/or monthly depending on your loan program.
- Prepaid interest: Covers interest from closing until your first payment.
- Escrow deposits: Lenders commonly collect one to three months of property tax and insurance reserves.
Title and title insurance
- Lender’s title insurance: Typically required by lenders and paid by the buyer.
- Owner’s title insurance: Protects your ownership. In many Illinois deals the seller pays, but it is negotiable and can vary by local custom.
- Title exam and closing fee: Often $300 to $800 combined, with possible small add-on endorsements.
Recording and transfer charges
- Recording fees: Lake County Recorder charges per document to record the deed and mortgage; amounts vary by pages and document type.
- Illinois state transfer tax: Historically $0.50 per $500 of price, about 0.1% of the sale price. Confirm current rules before closing.
- County or municipal transfer taxes: Some areas add local taxes or stamps. Verify whether Lake County or the Village of Vernon Hills has any local charges for your transaction.
Property taxes and prorations
- Tax prorations: Illinois property taxes are commonly paid in arrears. At closing, the tax bill is split so each party pays their share for the period, based on Lake County’s billing cycle and your closing date.
- Escrow reserves: Your lender may collect a few months of taxes and insurance upfront to seed your escrow account.
Inspections and surveys
- Home inspection: Typically $300 to $700 depending on size and scope.
- Radon test: Common in Illinois; plan for $100 to $200.
- Termite or pest inspection: Often $50 to $250 when requested.
- Sewer scope, septic, or well (if applicable): About $150 to $500 or more.
- Survey: If required or requested, plan for $300 to $1,000+ depending on property type and lot size.
HOA and condo items
- HOA or condo transfer fee: Commonly $100 to $500.
- Resale certificate or estoppel: Often $100 to $400.
- Prorated assessments: You will reimburse the seller for any prepaid dues or receive a credit if dues are unpaid, based on the closing date.
Third-party and legal
- Wire, courier, or convenience fees: Often $25 to $200.
- Notary: Small flat fees when needed.
- Attorney: In Illinois, hiring an attorney is your choice; many buyers do. Plan for about $500 to $1,500 or more depending on services.
- Home warranty (optional): Often $350 to $700 for the first year.
Local specifics to verify
- Illinois transfer tax: Confirm current rates and any exemptions before closing.
- Lake County recording: Check the Recorder’s office for the latest document and page-based recording fees.
- Property tax cycle: Work with your title company and lender to confirm how Lake County bills will be prorated for your parcel and closing date.
- Vernon Hills requirements: Ask the village clerk’s office if there are any local transfer or inspection requirements tied to your property type.
- Who pays owner’s title policy: In many northern Illinois transactions, sellers often pay the owner’s policy, but it depends on local custom and your contract. Clarify this early.
Example costs on a $400,000 home
These examples are for planning. Your Loan Estimate, Closing Disclosure, and title company settlement statement will show exact figures.
With a mortgage
- Loan, appraisal, credit, underwriting: About $3,000.
- Title (lender policy + closing fee): About $1,200.
- Owner’s title policy (if buyer pays): About $1,600, varies by rate schedule.
- Recording and transfer tax: About $600 total, including state transfer tax near $400 at 0.1% plus recording.
- Prepaids and escrow deposits: About $2,500 for insurance and a couple months of taxes.
- Inspections and radon: About $600.
- Illustrative total: Around $9,500, roughly 2.4% of the price. This can increase if you pay points, larger escrow reserves, or additional title items.
Cash purchase
- Typical items: Owner’s title policy, recording, transfer tax, prorated taxes, inspections.
- Ballpark: About $2,000 to $8,000 depending on title choices and inspections.
How to budget and save
- Compare at least 2 to 3 Loan Estimates. Review fees and APR side by side.
- Ask about lender credits versus points. A slightly higher rate may lower upfront cash, but compare long-term cost.
- Negotiate costs in the offer. You can ask the seller for credits toward closing costs, subject to loan program limits.
- Clarify who pays the owner’s title policy. Follow local custom, but negotiate when it supports your budget.
- Explore assistance programs. Check eligibility for down payment and closing cost help through state and local programs.
- Bundle services thoughtfully. It is fine to use one title company for multiple services, but ask for itemized quotes and compare.
- Avoid last-minute changes. Significant loan changes can require a new disclosure and delay closing.
Timeline and key documents
- Loan Estimate: You receive this within three business days of application. It outlines your estimated rate, payment, and closing costs.
- Inspections: Schedule right after your offer is accepted so you have time for results and negotiations.
- Title commitment and settlement estimate: Your title company provides the preliminary title report and an estimate of title and recording charges.
- Closing Disclosure: You receive this at least three business days before closing. Review it line by line and ask questions promptly.
- Funds to close: Arrange your wire or cashier’s check in advance. Always verify wire instructions by calling a known title company phone number to prevent fraud.
- Final walk-through and signing: You will confirm property condition, then sign your closing package and receive keys once funds disburse.
Buyer closing checklist
- Compare Loan Estimates from multiple lenders.
- Order home, radon, and any specialty inspections early.
- Request HOA documents and confirm any transfer or resale fees.
- Ask for a preliminary title commitment and fee quote.
- Verify tax prorations with your title company and lender.
- Confirm who pays the owner’s title policy per your contract.
- Review the Closing Disclosure carefully and on time.
- Arrange secure funds and confirm wire instructions by phone with the title company.
- If using assistance programs, confirm your eligibility, documentation, and funding timeline.
Buying in Vernon Hills should feel exciting, not confusing. When you understand the line items and local practices, you can plan your budget, negotiate with confidence, and get to the closing table without surprises. If you want clear numbers and steady guidance from search to keys, connect with Gina Shad for local expertise and a calm, well-managed closing.
FAQs
Who pays closing costs in an Illinois home purchase?
- Custom varies by market and your contract; buyers typically pay lender and many third-party fees, and sellers often pay the owner’s title policy in many Illinois transactions.
Are transfer taxes due for a Vernon Hills purchase?
- Illinois has a state transfer tax and some areas add local transfer taxes; verify Lake County and Village of Vernon Hills requirements with your title company.
When will I see my exact closing costs as a buyer?
- You receive a Loan Estimate early after application and a final Closing Disclosure at least three business days before closing with itemized costs.
Are home and radon inspections required in Illinois?
- Not by law, but they are strongly recommended and commonly included as purchase contingencies by buyers.
What are escrow reserves on a mortgage?
- Funds your lender holds to pay future property taxes and insurance, often seeded at closing with a couple months of payments.
Can I roll closing costs into my mortgage as a buyer?
- Often yes, subject to loan program rules, which raises your loan balance and monthly payment; confirm with your lender.
