Mortgage closing costs explained in one line: they are the one-time fees paid to finalize a home purchase, and they commonly run about 2% to 5% of the purchase price, a rule of thumb used widely in consumer guidance. On a $520,000 Short Pump home, that is roughly $10,400 to $26,000, and none of it is the down payment.
The question most buyers carry into the process is simple: how much cash do I need at the table, and what am I paying for? Duane Buziak answers it from the broker’s side of the desk, where one application can be priced across hundreds of wholesale lenders. He can also start with a soft credit pull mortgage review, so you see estimated fees before any hard inquiry touches your score. What follows is a line-by-line breakdown of the Closing Disclosure, worked Henrico County math, and the legitimate ways to reduce or restructure what you pay.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
The Line Items on a Short Pump Closing Disclosure
Two federal forms govern what you see. The Loan Estimate arrives within three business days of your application and lays out projected costs. The Closing Disclosure is the final version, and you must receive it at least three business days before closing. That window is your time to compare it against the estimate and ask questions. The CFPB explains the form on its page, What is a Closing Disclosure?, and the Loan Estimate page covers the earlier form.
The Closing Disclosure groups costs in a fixed order:
- Origination charges (Section A): what is paid for making the loan, including broker or lender compensation, underwriting, processing, and any discount points.
- Services you cannot shop for (Section B): items the lender picks, such as the appraisal, credit report, and flood certification.
- Services you can shop for (Section C): title search, the lender’s title insurance policy, settlement or closing fees, and a survey if one is required. You can choose these providers.
- Taxes and government fees (Section E): Virginia recordation taxes and Henrico Circuit Court recording charges.
- Prepaids and escrow (Sections F and G): the first year of homeowners insurance, prepaid interest from closing day to month end, and the initial escrow deposit for property taxes and insurance.
An optional owner’s title insurance policy appears in Section H. Many Virginia buyers purchase it because it protects your equity, not just the loan balance.
Cash you need that is not a closing cost
Two items require cash but do not belong in the closing cost total. The down payment is your equity, not a fee. Earnest money, the deposit you put down when the contract is ratified, is simply credited back against your total cash due at closing. When you budget, add the down payment to closing costs, then subtract the earnest money you have already paid. Buyers who confuse these categories often think a lender quote is wrong when it is only incomplete.
Who Gets Paid: Lender Fees, Third Parties, and Henrico County
Closing costs are not all lender fees. Splitting them by payee makes the total less mysterious.
The broker or lender receives compensation for originating the loan, plus underwriting and processing charges. The appraiser is paid for the valuation. The title company and settlement agent are paid for the title search, the title insurance premiums, and handling the closing itself. Government bodies receive recordation taxes and clerk fees when the deed and deed of trust are recorded. Your insurer and the county are paid out of prepaids and escrow, but those are not fees. They are your own recurring housing costs, paid early.
Virginia recordation taxes and Henrico recording
Virginia imposes a state recordation tax on deeds and deeds of trust, set in Virginia Code § 58.1-801, and localities add their own portion. As of November 2026, the state rate is generally $0.25 per $100 of value, and the local add-on has historically been one-third of the state amount. That works out to roughly $0.33 per $100 combined. Under the standard Virginia sales contract the buyer typically pays recordation tax on the deed and on the new deed of trust, while the seller pays the grantor’s tax, but your contract controls. Confirm current rates and clerk fees with the Henrico Circuit Court Clerk before you finalize a budget.
Prepaids versus fees
A fee is gone once you pay it. A prepaid is a down payment on a cost you would owe anyway. At closing you typically fund twelve months of homeowners insurance, interest from your closing date through month end, and an initial escrow cushion for taxes and insurance.
The tax piece is local. Henrico’s real estate tax rate has been $0.87 per $100 of assessed value in recent years, but confirm the current figure on the county’s finance page. At that rate, a home assessed at $520,000 carries about $4,524 a year, or $377 a month. Your escrow deposit is built from that monthly number, which is why two identical houses with different assessments produce different cash-to-close totals.
Worked Example: Closing Costs on a $520,000 Short Pump Home
Suppose you buy a $520,000 home near Short Pump Town Center with an FHA loan and 3.5% down. The down payment is $18,200 and the base loan is $501,800. The FHA upfront mortgage insurance premium of 1.75% adds $8,781.50, which is financed, so the loan becomes $510,581.50. The figures below are illustrations as of November 2026, not a quote.
| Category | Paid to | Illustrative estimate | Notes |
|---|---|---|---|
| Origination charges (A) | Broker / lender | $4,000 | Compensation, underwriting, processing |
| Appraisal, credit report, flood cert (B) | Third parties | $740 | Lender-selected |
| Lender’s title and settlement (C) | Title company | $2,300 | Shoppable |
| Owner’s title policy (H) | Title company | $1,300 | Optional but common |
| Recordation taxes and clerk fees (E) | Virginia / Henrico | $3,500 | About $0.33 per $100 on deed and deed of trust |
| Prepaids and escrow (F, G) | Insurer, county, interest | $4,542 | $1,800 insurance, $1,311 interest, $1,131 taxes, $300 cushion |
| Total | $16,382 | About 3.2% of price |
Lender fees are $4,000, third-party and government fees are $7,840, and prepaids and escrow are $4,542. The total sits inside the 2% to 5% band ($10,400 to $26,000). Cash needed before earnest money is $18,200 plus $16,382, or $34,582.
What a seller credit or lender credit changes
Say the seller agrees to a $10,000 credit. Cash to close drops to $24,582. Now add a lender credit of 1% of the base loan, $5,018, in exchange for a rate about 0.25 point higher. Closing costs fall to $1,364, and cash needed is $19,564.
The credit is not free. At illustrative rates of 6.25% versus 6.50% on $510,581.50, the principal and interest payment rises from about $3,144 to about $3,227, roughly $83 a month. Divide $5,018 by $83 and you get a breakeven near 60 months. If you expect to keep the loan longer than five years, the higher rate costs more than the credit saved.
The loan is also well inside conforming range. The FHFA 2026 baseline conforming limit is $806,500, with a high-cost ceiling of $1,249,125, so $510,581.50 raises no jumbo concerns.
Comparison of Closing Cost Treatment by Loan Program
Each program moves the same costs around differently. The main differences are the upfront insurance or fee, how much a seller can contribute, and the credit floor. Figures are as of November 2026 and should be confirmed against current program rules.
| Program | Min. down payment | Upfront mortgage insurance or fee | Seller concession limit | Credit minimum | Soft pull availability |
|---|---|---|---|---|---|
| FHA | 3.5% (580+ FICO) | UFMIP 1.75% of base loan, financeable | Up to 6% of price | 580 for 3.5% down; 500 to 579 generally needs 10% down | Yes, via NoTouch Credit Pull |
| VA | 0% | Funding fee; 2.15% for first use with no down payment, lower with down payment, waived for some veterans | Customary closing costs plus up to 4% in concessions | No VA minimum; Duane Buziak works down to 500 FICO | Yes |
| USDA | 0% | Upfront guarantee fee, financeable | Up to 6% of price | Commonly 640 for automated approval | Yes |
| Conventional | 3% to 5% typical | None upfront; monthly PMI under 20% down | 3%, 6%, or 9% depending on down payment | Commonly 620 | Yes |
| Dynamo DPA / Turbo DPA pairing | Set by the underlying loan and DPA terms | Follows the underlying FHA or conventional loan | Follows the underlying loan | Set by the program at application | Yes, for the initial review |
The sources behind the table are public. VA.gov’s funding fee and closing costs page lists current fee tiers and exemptions. HUD’s FHA loan page describes FHA mortgage insurance, and Fannie Mae’s interested party contribution rules set the conventional caps. VA cash-out refinances can go to 100% loan-to-value, which matters if you later refinance and want to roll costs into the new balance.
On USDA, check the address first. Eligibility depends on the property’s location, and much of the Richmond suburban area falls outside eligible zones.
The funding fee and UFMIP can be financed, as in the example above. That raises the loan amount and the monthly payment slightly, but it does not change the cash you bring to closing.
Legal Ways to Cut or Cover Closing Costs
These tactics are ranked roughly by how reliably they work and how little they cost you in the long run.
- Shop the shoppable services. Section C items such as title and settlement fees can vary between providers. Your Loan Estimate lists the providers you may compare.
- Negotiate seller concessions. In a balanced market, a credit toward closing costs may be easier to win than a lower price, and it reduces cash needed. It must stay within the program cap shown above.
- Weigh lender credits against discount points. Points lower the rate for an upfront cost. Credits do the opposite. The right choice depends on how long you will keep the loan.
- Time your closing date. Prepaid interest runs from closing day through month end, so a closing near the end of a month leaves fewer days to prepay. Your monthly payment schedule does not change.
- Use down payment assistance. Duane Buziak works with Dynamo DPA and Turbo DPA. Terms, eligibility, and whether funds can help with closing costs vary by program and change over time, so confirm current details at application.
No-out-of-pocket closing options and the breakeven test
A no-out-of-pocket closing option does not mean costs vanish. They are paid by a seller credit, a lender credit taken at a slightly higher rate, or a combination. In the $520,000 example, a seller credit of $11,364 plus the $5,018 lender credit covers the entire $16,382, leaving only the down payment. The tradeoff is the roughly $83 monthly increase, with a breakeven near five years. Always ask for that number. If a loan officer cannot tell you the breakeven, you are not seeing the whole picture.
The most common mistake is choosing the lowest advertised rate without lining up the Loan Estimates side by side. A rate that is 0.125 point lower can arrive with thousands in extra origination charges or points. Compare the total cost across the first five to seven years, not the headline rate alone.
Why Duane Buziak Shops 500+ Wholesale Lenders Instead of One Rate Sheet
The structural difference is simple. Retail lenders price loans from one company’s rate sheet. Duane Buziak is an independent soft pull mortgage broker with access to more than 500 wholesale lenders, so the same application can be priced across many programs and the best fit chosen on cost, not on whose product is on the shelf.
The first step is NoTouch Credit Pull. Duane Buziak can run a soft credit pull mortgage review, a no hard inquiry mortgage pre approval, so you see realistic fee estimates without a hit to your score. It works as a mortgage pre approval without hard pull for the initial stage, and it is a true no credit hit mortgage application start. A full credit report is generally still required later for underwriting, but you can compare your options first.
Then compare Loan Estimates from multiple sources, including Duane Buziak’s. Match these lines against each other:
- Section A: origination charges and any points.
- Sections B and C: third-party services, and which ones you can shop.
- Points and credits: whether the rate assumes you are paying points or receiving a credit.
- Total closing costs and cash to close: the bottom lines on page two.
Start with a NoTouch Credit Pull to get the accurate estimate you need to make that comparison. Estimates built without your real credit profile tend to be optimistic.
Short Pump Closing Cost Questions Answered
What are typical closing costs on a $520,000 home in Short Pump?
Typical closing costs on a $520,000 home run about $10,400 to $26,000, the 2% to 5% range, and the illustration above lands near $16,400 as of November 2026. Your actual figure depends on loan program, points, title choices, and prepaids.
Can I roll closing costs into the loan in Henrico County?
Only in limited cases. Programs like FHA and VA let you finance upfront mortgage insurance or the funding fee, but most closing costs must be paid in cash, by a seller credit, or by a lender credit. Purchase loans cannot exceed the program’s loan-to-value limit.
How do seller credits work in Henrico contracts?
A seller credit is written into the sales contract as a dollar amount or percentage toward your costs. It must stay within your loan program’s concession cap and can only offset closing costs and prepaids, not your down payment.
Who pays Virginia recordation taxes?
The buyer typically pays recordation tax on the deed and deed of trust, and the seller pays the grantor’s tax, under the standard Virginia contract. Your contract controls, so check the terms before you sign.
How does escrow for Henrico property taxes work?
Your servicer collects one-twelfth of the annual tax bill with each payment and pays Henrico on your behalf. At closing you fund an initial deposit, often a few months, based on the assessed value and the county’s current rate, which you should confirm on henrico.us.
Does a soft pull pre-approval show estimated closing costs?
Yes. A soft pull review through NoTouch Credit Pull lets Duane Buziak produce fee and cash-to-close estimates, though final figures come with the Loan Estimate after a formal application.
How does down payment assistance interact with closing costs?
It depends on the program. Some DPA funds can help with down payment and closing costs, while others have limits, so Duane Buziak confirms current Dynamo DPA and Turbo DPA terms, as of November 2026, against your chosen loan before you rely on them.
How long does a Loan Estimate stay valid?
Typically at least ten business days from delivery for the settlement charges that do not depend on your rate. Interest rates are not guaranteed by the estimate alone, so a rate lock is a separate step.
Closing Costs Are Itemized, Which Means They Can Be Negotiated
Every dollar at the closing table has a payee, a line number, and often an alternative. The fee list is known in advance, the shoppable items can be compared, and credits can shift cost to the seller or into the rate. The work is in comparing real numbers before you commit. Ask for a soft pull Loan Estimate from Duane Buziak at Short Pump Mortgage by Duane Buziak, (804) 212-8663.
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