Ever look at a Loan Estimate and wonder where all those numbers come from? You are not alone. Closing costs can feel mysterious when you are buying in San Mateo, especially with Bay Area price points and city-by-city rules. This guide breaks down what you will pay, how to estimate your cash to close, and which local details to double-check so there are no surprises. Let’s dive in.
What closing costs include
Closing costs are the fees, prepaids, prorations, and escrows that both buyer and seller pay to complete the sale. They are different from your down payment. Typical buyer items include lender fees, title and escrow charges, appraisal, inspections, prepaid interest, property taxes, and homeowner’s insurance.
Soon after you apply for a mortgage, your lender provides a Loan Estimate that outlines these costs. At least three business days before you close, you receive a Closing Disclosure that lists the final numbers. Review both carefully and ask questions early.
How much San Mateo buyers pay
As a rule of thumb, buyers in San Mateo usually see closing costs of about 2% to 5% of the purchase price. The exact amount depends on your loan program, discount points, escrow reserves, HOA fees, and timing.
For example, on a $1,500,000 home, a 2% to 5% range means about $30,000 to $75,000 in closing costs. That estimate does not include your down payment. Actual totals vary, so plan conservatively and refine your numbers with your lender and escrow team.
Buyer closing cost line items
Mortgage and lender fees
- Loan origination and processing: often 0.5% to 1.5% of the loan amount, or a flat $500 to $3,000.
- Discount points: optional. One point equals 1% of the loan amount in exchange for a lower rate.
- Appraisal: typically $600 to $1,200 or more for complex properties.
- Credit report and underwriting: usually modest and sometimes included in origination.
Title and escrow
- Lender’s title insurance policy: usually paid by the buyer to protect the lender’s lien.
- Owner’s title insurance policy: in many California transactions the seller often pays, but this is negotiable. Confirm with your title officer.
- Escrow or settlement fee: commonly split, but it can vary by agreement and local practice.
Recording, taxes, and transfer items
- Recording fees: county charges to record the deed and mortgage. Buyers typically pay to record the mortgage.
- Transfer taxes: county and some cities impose a transfer tax when property changes hands. Who pays is negotiable, though many local deals have sellers cover it. Verify the specific city.
Prepaids and reserves
- Prepaid property taxes: prorated based on the closing date. You may also fund initial tax reserves if your loan includes an escrow account.
- Homeowner’s insurance: first year’s premium is often collected at closing.
- Prepaid interest: daily interest from funding to the start of your first payment.
- Mortgage insurance: upfront premiums may apply for certain loan types.
HOA and inspections
- HOA transfer or estoppel fee: often $100 to $400, plus prorated dues.
- Inspections: home, pest, roof, sewer, and others can range from a few hundred dollars to more than $1,500 depending on scope.
Who typically pays what locally
In many California transactions, sellers pay the owner’s title policy and the bulk of real estate commissions, which commonly total 5% to 6% of the sale price. Escrow fees are often split. Transfer taxes vary by city and may be negotiated. Customs differ by neighborhood and even by escrow company, so confirm early.
Estimate your cash to close
Use this simple formula:
- Net Cash to Close = Down Payment + Buyer Closing Costs + Prepaids/Reserves − Seller Credits − Earnest Money Deposit
Follow this quick workflow:
- Start with the purchase price and your down payment percentage.
- Add buyer closing costs. Use 3% to 4% for planning unless your lender quotes a different figure.
- Add prepaids and reserves for taxes, insurance, and interest.
- Subtract any seller credits you negotiated.
- Subtract your earnest money already in escrow.
Sample for a $1,500,000 purchase:
- 20% down payment: $300,000
- Buyer closing costs at 3%: $45,000
- Prepaids/reserves (estimate): $3,500
- Earnest money deposit: $50,000
- Seller credits: $0
Estimated cash to close = $300,000 + $45,000 + $3,500 − $50,000 = $298,500
Replace estimates with your lender’s Loan Estimate and your escrow officer’s fee quote for accuracy.
San Mateo items to verify
Transfer taxes by city
San Mateo County and some incorporated cities may charge transfer taxes when property changes hands. Amounts and who pays can vary by city. Ask your agent or escrow officer to confirm the county and city rates for your specific address.
Property tax calendar and supplemental bills
California property taxes are paid in two installments on a set schedule. After a sale, you may receive a supplemental tax bill because of reassessment. Budget for this possibility.
HOA fees and certificates
If the property is in an HOA, expect an estoppel or resale certificate fee and prorated dues at closing. Some associations also charge a small transfer or capital contribution fee. Confirm with the HOA manager early.
Title and escrow customs
Sellers often pay the owner’s title policy and buyers pay the lender’s policy in many Bay Area deals. Escrow fees may be shared. These are customs, not rules, so your purchase agreement controls.
Assistance programs
Down payment assistance or special loan programs may be available through county and state agencies. Program terms change often. Contact the county housing office or a HUD-approved housing counselor to review current options.
Timeline and when costs hit
- Offer accepted and escrow opens: your earnest money deposit is due shortly after acceptance.
- Loan application: your lender issues a Loan Estimate within three business days.
- Inspection period: you typically pay for inspections as you order them.
- Appraisal ordered: appraisal fee is usually charged at that time.
- Final approval: you receive a Closing Disclosure at least three business days prior to signing.
- Signing and funding: prepaids, reserves, and remaining cash to close are due at settlement.
Ways to reduce upfront cash
- Ask your lender about a lender credit in exchange for a slightly higher interest rate.
- Negotiate a seller credit to cover a portion of your closing costs, subject to loan program limits.
- Consider whether it makes sense to finance certain costs or points if your lender allows it.
- Explore first-time buyer or local assistance programs if you qualify.
- Skip optional add-ons you do not need.
Avoid these pitfalls
- Confusing the down payment with closing costs. They are separate.
- Forgetting prepaid interest tied to your actual funding date.
- Underestimating the escrow cushion for taxes and insurance your lender may require.
- Overlooking HOA transfer fees or pending special assessments.
- Ignoring the likelihood of a supplemental property tax bill after reassessment.
What to have ready
- Government-issued ID and executed purchase agreement.
- Proof of earnest money deposit and source of funds for your down payment.
- Recent bank statements and any gift documentation required by your lender.
- Homeowner’s insurance binder and agent contact.
- Seller disclosures and HOA documents, if applicable.
Bottom line for San Mateo buyers
Plan for buyer closing costs of 2% to 5% of the price, plus your down payment. Verify city and county transfer taxes, HOA fees, and escrow splits early. Use your Loan Estimate and Closing Disclosure to dial in the details and avoid last-minute surprises. If you want a local, steady hand to help you budget and negotiate credits, you can count on Coastside expertise and Peninsula know-how.
Ready to run your numbers and build a plan that fits your goals? Reach out to Frank Vento for a local, high-touch approach to buying in San Mateo and across the Peninsula.
FAQs
How much are closing costs for a $1.5M home in San Mateo?
- Buyers commonly see about 2% to 5% of the price, or roughly $30,000 to $75,000, plus prepaids and reserves and separate from the down payment.
Who usually pays owner’s title insurance in San Mateo County?
- In many California deals sellers often pay the owner’s policy while buyers pay the lender’s policy, but it is negotiable and confirmed in your contract.
When is my first mortgage payment due after closing in California?
- Your first payment usually falls about 30 to 45 days after the first day of the month following funding; prepaid interest at closing covers the days before that.
Can the seller help pay my closing costs in San Mateo?
- Yes, through negotiated seller credits within your loan program’s limits; ask your lender how much is allowed and structure it in your offer.
Are there city transfer taxes in San Mateo, and who pays them?
- Some cities and the county charge transfer taxes; who pays is negotiable but often the seller in local practice, so verify rates and responsibility early with escrow.
