When buying a home in Northeast Pennsylvania especially in the Poconos it’s important to understand that your down payment is just one piece of the puzzle. There are several additional costs involved in getting to the closing table and knowing what to expect ahead of time can make the process much smoother.

Let’s break down the different components of closing costs and how they show up in your Loan Estimate and Closing Disclosure.

Section A: Lender Fees

These are the fees charged directly by your lender and the good news is, some of these may be negotiable.
They typically include:

• Underwriting fees
• Loan origination fees (this is the lender’s commission)
• Discount points (if you choose to buy down your interest rate)

Section B: Services You Cannot Shop For

These are third-party services required by the lender, and invoices are provided for each.
Common items include:

• Appraisal
• Credit report
• Tax service
• Flood certification
• Appraisal re-inspection (if needed)
• Third-party processing

Section C: Title Fees

Title fees are associated with transferring ownership of the property. While title insurance itself has set pricing, there may be additional fees such as:

• Closing protection letter
• Title Endorsements
• Settlement/closing fee
• Document preparation
• Wire transfer fee

Your title company will provide a full breakdown of these costs prior to closing.

Section E: Transfer Taxes & Recording Fees

In Pennsylvania, the transfer tax is typically 2% of the purchase price and is usually split between the buyer and seller.
However, some areas like the City of Scranton may have higher transfer taxes. Recording fees are also included in this section.

Section F: Prepaid Costs

Prepaids are upfront costs collected at closing to set up your loan properly. These include:

• Your first year of homeowners insurance
• Prepaid interest

How prepaid interest works:
Mortgage interest is paid in arrears, meaning your first payment covers the previous month. If you close mid-month, the lender collects interest for the days between closing and the start of the next month.

Section G: Escrow (Impound) Account

If your loan requires (or you choose) an escrow account, this is where funds are collected to pay your property taxes and homeowners insurance.

Your lender collects a portion each month and pays those bills on your behalf when they’re due. While this adds to your upfront costs, it can be a great way to simplify budgeting and avoid large lump-sum payments later.

Section H: Miscellaneous Fees

This section can include:

• Realtor fees paid by the buyer (if applicable)
• HOA or community transfer fees
• Other one-off costs specific to the transaction

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Ways to Reduce Your Closing Costs

There are options to help offset some of these expenses:

• Lender credits (in exchange for a slightly higher rate)
• Seller concessions negotiated in your purchase agreement

A knowledgeable real estate agent can help negotiate these on your behalf, and a mortgage broker can walk you through the best strategy based on your situation.

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Final Thoughts

Buying a mountain home in the Poconos is an exciting step but understanding the full financial picture is key. Closing costs can feel overwhelming at first, but with the right guidance, you’ll know exactly what to expect and how to plan for it. Also know that lenders are required to disclose fees through the process so there are no surprises.

If you’re thinking about buying and want a clear breakdown tailored to your scenario, I’m always here to help walk you through it.