Buying a home in Tustin is exciting, but the cash you need to close can feel like a mystery. You might be wondering what counts as a closing cost, who pays what in California, and how much to set aside on top of your down payment. You are not alone, and you can plan with confidence.
In this guide, you’ll learn what Tustin buyers typically pay, how much to budget, where costs come from, and how to reduce them. You’ll also get a simple formula to estimate your cash to close, plus realistic example totals. Let’s dive in.
What closing costs cover in Tustin
Closing costs are the one-time fees and prepaids due when you finalize your purchase. In California, buyers usually plan for about 2% to 5% of the purchase price for closing costs, not including your down payment. Here is where that money goes.
Loan-related costs
If you are financing, expect several lender and third-party fees:
- Lender origination and underwriting: typically 0.5% to 1.0% of the loan amount, depending on lender and program.
- Discount points: optional fee to lower your interest rate. One point equals 1% of the loan amount.
- Appraisal: usually 450 to 900 dollars for a standard single-family home in Orange County. Complex properties or rush orders can cost more.
- Credit report: about 25 to 50 dollars.
- Other loan-related third-party fees: flood certificate, tax service, and similar items often total 100 to 500 dollars combined.
- Mortgage insurance: upfront premiums for FHA or private mortgage insurance for conventional loans may apply based on your program and down payment.
Title and escrow fees
Title and escrow handle the settlement, ensure a clear title, and manage document recording.
- Lender’s title insurance policy: buyers in most California transactions pay for the lender’s policy. The premium is typically a fraction of 1% of the loan amount based on rate tables.
- Escrow or settlement fee: commonly split between buyer and seller in California, with a typical buyer share of 1,000 to 3,000 dollars depending on price and company.
- Title search and closing charges: usually bundled into the title and escrow invoice. Combined title plus escrow often totals 1,500 to 4,000 dollars depending on purchase price and provider.
Inspections and property condition
You choose which inspections to order, and you usually pay for them.
- General home inspection: about 300 to 800 dollars based on size and age.
- Pest or wood-destroying organism inspection: commonly required by lenders in Southern California, often 75 to 250 dollars.
- Specialty inspections: roof, sewer scope, chimney, or HVAC as needed, typically 150 to 600 dollars each.
Government and recording charges
These are required to record your purchase and loan, and to prorate taxes.
- Recording fees: often 50 to 200 dollars total depending on the number of documents.
- Documentary or transfer taxes: set by the county and sometimes the city. Practices vary, and who pays is negotiable. Verify with Orange County and the City of Tustin through your escrow and title team.
- Property tax proration: in California, base property taxes are roughly 1.0% of assessed value plus local assessments. At closing, you reimburse the seller for taxes already paid for the period after your closing date.
- Special assessments: Mello-Roos or Community Facilities District (CFD) taxes appear in the preliminary title report and are typically prorated. These can be material in parts of Orange County.
Prepaids and reserves
These are not fees for services. They are future costs paid upfront so your lender can set up your account.
- Prepaid mortgage interest: covers the period from funding until your first mortgage payment.
- Property taxes: a portion may be collected at closing depending on your timing.
- Homeowner’s insurance: lenders often collect the first year’s premium, commonly 600 to 2,000 dollars or more depending on coverage.
- HOA items: monthly dues are prorated, and HOA move-in or estoppel fees are often 150 to 400 dollars.
Other possible costs
- Home warranty: optional, commonly 300 to 700 dollars for a one-year plan.
- Notary or courier: modest amounts.
- Surveys are rare in many California purchases but can be requested.
How much to budget in Tustin
A helpful rule of thumb is to plan for 2% to 5% of the purchase price for closing costs, not including your down payment. Realistic planning ranges based on that guideline look like this:
- 800,000 dollar purchase: about 16,000 to 40,000 dollars
- 1,200,000 dollar purchase: about 24,000 to 60,000 dollars
- 1,500,000 dollar purchase: about 30,000 to 75,000 dollars
Use the lower end if you are paying all cash or have strong seller credits. Use the higher end if you are financing and will include lender fees, prepaids, insurance, HOA items, and other third-party charges.
Who pays what in California and Tustin
Norms exist, but every deal is negotiated. Your purchase agreement and escrow instructions will control the final allocation.
What buyers usually pay
- Lender fees, appraisal, and credit report
- Lender’s title policy in most California transactions
- A share of escrow or settlement fees, often split 50/50
- Recording fees associated with the buyer’s mortgage
- Buyer-ordered inspections
- Prepaids required by the lender, including insurance and prepaid interest
- HOA move-in or estoppel fees when applicable
What sellers usually pay
- Owner’s title insurance policy in California custom
- Documentary transfer taxes in many markets, but this is negotiable and can vary by county and city
- Real estate commissions
- Required disclosures and any repairs the seller agreed to during negotiations
What is negotiable
- Seller credits toward your closing costs are common when allowed by the loan program and market conditions. Program limits vary.
- Typical limits include: FHA allows seller concessions up to 6% of the sale price. VA and conventional loans allow seller contributions but have specific caps and rules. Always confirm current limits with your lender.
- Escrow and recording fee splits are often negotiated or follow local custom.
Estimate your cash to close
Use this simple formula to build your plan:
Down payment + Closing costs (estimate 2% to 5%) + Prepaids and reserves − Seller credits = Estimated cash to close
Here are three example scenarios to illustrate how the pieces add up. Your numbers will differ based on your lender quote, escrow and title fees, inspection choices, and timing.
Scenario A: 800,000 dollar purchase, 20% down, 2% closing costs
- Down payment: 160,000 dollars
- Closing costs: 16,000 dollars
- Prepaids and reserves: 3,000 dollars (estimate)
- Estimated cash to close: about 179,000 dollars
Scenario B: 1,200,000 dollar purchase, 10% down, 3.5% closing costs
- Down payment: 120,000 dollars
- Closing costs: 42,000 dollars
- Prepaids and reserves: 4,500 dollars (estimate)
- Estimated cash to close: about 166,500 dollars
Scenario C: 1,500,000 dollar purchase, 5% down, 4.5% closing costs
- Down payment: 75,000 dollars
- Closing costs: 67,500 dollars
- Prepaids and reserves: 6,000 dollars (estimate)
- Estimated cash to close: about 148,500 dollars
Always rely on your lender’s Loan Estimate early in the process and the Closing Disclosure three business days before closing for the final number.
Timing and how to verify exact numbers
Early steps: set your budget with quotes
- Get preapproved and request a Loan Estimate from your selected lender. Compare at least two lenders on rate, fees, and service.
- Ask your agent and escrow officer for written escrow and title fee quotes tied to your purchase price in Tustin.
- If the home is in an HOA, ask the management company about estoppel and move-in fees and confirm monthly dues for proration.
Under contract to close: keep everything current
- Order inspections right away. Credits or repairs you negotiate can change your cash to close.
- Review the Preliminary Title Report for Mello-Roos or CFD taxes, easements, and local assessments that affect both closing prorations and ongoing costs.
- Expect your Closing Disclosure at least three business days before signing. It will show the final cash to close and how to send funds to escrow.
Ways to reduce or manage closing costs
- Shop lenders. Compare origination and underwriting fees, and ask about lender credits. A slightly higher rate can sometimes offset upfront costs.
- Negotiate seller credits. Your ability to secure credits depends on the market and your loan program’s limits.
- Compare title and escrow providers if you have a choice. Fees can vary by company and price tier.
- Apply credits to prepaids. When allowed by your lender, using credits for insurance and taxes can reduce your cash out of pocket.
- Consider rolling certain costs into the loan if available, understanding it increases your balance and interest over time.
- Keep a buffer. Set aside an extra 5% to 10% of the expected closing costs to cover last-minute prorations or adjustments.
Local factors to watch in Tustin
- Special assessments: Some Orange County neighborhoods include Mello-Roos or CFD taxes. These are disclosed in title reports and are prorated at closing. They also affect your future tax bill.
- Transfer taxes: Documentary or transfer taxes can apply at the county level and sometimes the city level. Practices on who pays vary and are negotiable. Confirm the current rules with your escrow officer for your specific address.
- HOA communities: Budget for estoppel or move-in fees and for prorated dues. Ask early so you are not surprised late in escrow.
Ready to plan your purchase?
You deserve clear numbers and a smooth closing. If you are buying in Tustin or North Tustin, our team will help you compare lender quotes, estimate escrow and title fees for your price point, and negotiate smart credits when the market allows. For trusted local guidance from first tour to final signing, connect with The O'Dell Group.
FAQs
What are typical buyer closing costs in Tustin?
- Most buyers should plan for about 2% to 5% of the purchase price for closing costs, not including the down payment. Your exact number depends on loan type, lender fees, inspections, HOA status, and credits.
Do closing costs include my down payment?
- No. Closing costs are separate from your down payment. Plan for both the down payment and the 2% to 5% closing cost range, plus prepaids and reserves.
Will the seller pay my closing costs in Tustin?
- Possibly. Seller-paid credits are negotiable and subject to loan program limits. They are more common when the market favors buyers or when you offer other favorable terms.
When will I know my final cash to close?
- Your lender’s Closing Disclosure, delivered at least three business days before closing, lists the final amount. The Loan Estimate you receive earlier gives an initial benchmark.
Do I pay property taxes at closing in Orange County?
- Yes, property taxes are prorated. You reimburse the seller for taxes covering the period after your closing date, and you may prepay a portion depending on timing.
Are there city transfer taxes in Tustin and who pays them?
- Transfer taxes vary by county and sometimes by city. Who pays is often negotiated. Confirm the current rates and local custom with your escrow and title team for your specific property.
How do HOA fees affect my closing costs for a Tustin condo or townhouse?
- HOA dues are prorated at closing, and many associations charge an estoppel or move-in fee, often 150 to 400 dollars. Ask the HOA or management company early to budget accurately.
