Buying a home in Hershey is exciting, but the final number you bring to the closing table can feel unclear. You might be asking how much to budget, which fees are normal in Dauphin County, and what parts are negotiable. This guide breaks down common closing costs, local customs, and simple steps to estimate your cash to close with confidence. Let’s dive in.
What closing costs include in Hershey
Closing costs cover three buckets:
- Transaction fees from your lender, title company, and sometimes an attorney.
- Government fees like recording and transfer taxes.
- Prepaid items such as homeowner’s insurance, property tax escrows, and daily interest.
A good rule of thumb is to plan for about 2% to 5% of the purchase price for closing costs and prepaids. Your total will depend on your loan type, exact transfer taxes in Derry Township or nearby municipalities, whether you negotiate seller credits, and the timing of your closing.
Transfer taxes in Dauphin County
In Pennsylvania, transfer tax has layers. There is a state realty transfer tax and a local component that can be charged by the county and municipality. The combined rate varies by location, so you should verify the exact amount for your Hershey address.
In many Pennsylvania municipalities, combined transfer taxes fall roughly between 1.0% and 2.0% of the sale price. Who pays is negotiable and often follows local custom. In some transactions the buyer and seller split the tax. In others, one party covers more. Always confirm current practice for your specific Hershey property and note what your contract states.
Lender fees and loan-related costs
Most buyers will see several lender charges on the Loan Estimate and Closing Disclosure. Common items include:
- Origination, application, and underwriting fees. These may be a flat fee or a percentage of the loan amount, often about 0.25% to 1.0% of the loan.
- Appraisal fee. In Central Pennsylvania, a typical appraisal ranges about 400 to 800 dollars depending on property type and complexity.
- Credit report, flood certification, and tax service fees. These are smaller fixed costs.
- Discount points. Optional fees paid to lower your rate.
By rule, your lender must provide a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before closing. Review both carefully.
Title and settlement costs
You will also see title and settlement charges. Key items include:
- Title search and exam. This checks public records for liens or title issues.
- Lender’s title insurance policy. Most lenders require it and buyers typically pay this premium.
- Owner’s title insurance policy. Optional but recommended. Who pays varies by local custom and negotiation in the Hershey market.
- Settlement or closing fee. Charged by the title company or attorney handling closing.
- Recording fees. Set by Dauphin County to record the deed and mortgage.
In our area, closings are handled by title companies or attorneys. Fees vary, so ask for a written estimate.
Inspections and surveys
Inspection and survey costs depend on the home and your choices.
- Home inspection. Often about 300 to 600 dollars for a single-family home. Older or larger homes and specialty inspections may cost more.
- Pest, radon, well, or septic inspections. Ordered as needed and priced separately.
- Survey. Sometimes requested by a lender or buyer. Costs can range from about 300 dollars to 1,000 dollars or more based on scope.
Prepaids and escrows
Prepaids are not fees but upfront costs to start your insurance and tax accounts.
- Homeowner’s insurance. Many lenders collect the first year’s premium at closing.
- Property taxes. You will see prorations based on closing date and initial reserves for your escrow account.
- Mortgage interest. Lenders usually collect daily interest from the day you close through month end.
- Escrow startup. Lenders often collect 1 to 2 months of reserves for taxes and insurance, depending on billing cycles and timing.
Sample buyer budgets for Hershey
Use these examples to plan. Your numbers will change based on transfer taxes, loan type, and negotiated credits.
- Example A, lower-cost plan. About 2% of price if the seller pays most transfer tax and the owner’s title policy. On a 300,000 dollar home, budget around 6,000 dollars.
- Example B, typical plan. About 3% of price when you pay standard lender fees, half of transfer tax, the owner’s title policy, first-year insurance, and escrow startup. On a 400,000 dollar home, budget around 12,000 dollars.
- Example C, conservative plan. About 4% to 5% of price if you pay full transfer taxes, larger escrows, and add survey or specialty inspections. On a 600,000 dollar home, budget about 24,000 to 30,000 dollars.
What drives your total
Several factors can move your cash to close up or down:
- Local transfer tax rate and who pays it.
- Loan program. FHA and VA have different upfront costs.
- Points and lender credits. A credit can reduce cash to close but may raise your rate.
- Closing date. Month-end vs. early-month changes prepaid interest and escrow needs.
- Owner’s title policy. Whether you or the seller pays is negotiable.
- HOA or condo fees. Transfer, move-in, or document charges may apply.
How to estimate your cash to close
Follow these steps to get a clear number well before closing day:
- Apply with your lender and review the Loan Estimate within three business days.
- Ask a local title company or attorney for a written quote showing title premiums, settlement fees, and recording charges.
- Confirm the combined state and local transfer tax for your Hershey address with Dauphin County and Derry Township, and note who pays per your contract.
- Decide on an owner’s title policy and confirm the premium and payer.
- Get an insurance quote for your home and ask your lender how many months of reserves they will collect.
- Add inspection and survey costs based on the property and your due diligence plan.
- Recheck everything on your Closing Disclosure at least three business days before settlement.
Local tips for Hershey closings
- Verify the municipality. Much of Hershey sits in Derry Township. The correct municipality determines the local transfer tax and recording details.
- Ask about local custom. In some transactions the transfer tax and owner’s policy are split. In others, one party may cover more. Your contract controls, so clarify early.
- Title company or attorney. Both are used in Pennsylvania. Compare quotes and timelines.
- Timeline. Expect appraisal, underwriting, and a Closing Disclosure at least three business days before closing. Schedule your final walk-through close to settlement.
Buyer checklist before closing
- Review your Loan Estimate and Closing Disclosure. Ask about any fee you do not recognize.
- Request a draft settlement statement from the title company showing credits and who pays each line.
- Confirm the exact transfer tax rate and payer with county and municipal offices.
- Review the title commitment and the owner’s title policy option.
- Verify prorations for property taxes and utilities.
- Bring a government ID, your insurance binder, and certified funds or verified wire instructions.
- Protect your funds. Call a known phone number to confirm wiring instructions and never rely only on email.
Common negotiation options
- Ask for a seller credit toward closing costs in your initial offer.
- Request a split of transfer tax or an agreement for the seller to pay the owner’s title policy.
- Consider lender credits to reduce upfront cash if a slightly higher rate still fits your budget.
- Time your closing to balance prepaid interest and escrow needs.
Buying in Hershey should feel exciting and clear. If you want a personalized estimate based on your target price, loan type, and timing, reach out for a short consult. Schedule a conversation and walk into closing day with confidence.
Ready to plan your numbers for a Hershey home? Connect with Denise Bollard to schedule a consultation and get a personalized breakdown for your purchase.
FAQs
How much should a Hershey buyer budget for closing costs?
- Most buyers plan for about 2% to 5% of the purchase price, including lender fees, title costs, transfer taxes, and prepaids.
What are typical transfer taxes for Hershey and Derry Township?
- Pennsylvania has a state tax plus possible county and municipal components, which vary by location. Confirm the exact combined rate with Dauphin County and Derry Township.
Who usually pays transfer tax in Dauphin County?
- It is negotiable and influenced by local custom. Many transactions split the tax, but your purchase contract controls.
When will my lender disclose final closing costs?
- You should receive a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before closing.
Do I need owner’s title insurance in Hershey?
- It is optional but recommended. It protects your ownership against covered title defects and is a one-time premium. Who pays can be negotiated.
What inspections are common for homes in Central Pennsylvania?
- Standard home inspections are common, with pest, radon, well, and septic added as needed. Costs vary by property and scope.
