Closing costs are one of the most misunderstood expenses in real estate, and for first-time buyers in Mililani, they can come as a surprise if you are not prepared. These fees are separate from your down payment and cover the services required to finalize the purchase of your home. Here is what you need to know so there are no surprises at the closing table.

How Much Are Closing Costs in Hawaii

In Hawaii, buyer closing costs typically range from 2 to 5 percent of the home's purchase price. For a $750,000 home in Mililani, that means you could pay between $15,000 and $37,500 in addition to your down payment. The exact amount depends on your loan type, lender fees, and the services involved in your transaction.

How Costs Are Split Between Buyer and Seller

The Hawaii Association of Realtors Standard Purchase Contract, specifically Section F-6, outlines the customary allocation of closing costs between buyer and seller. While these are standard, they can be negotiated in your offer:

• Title insurance: Buyer pays 40 percent and seller pays 60 percent of the standard coverage premium
• Escrow fee: Split 50/50 between buyer and seller
• Conveyance tax: Paid by the seller
• Recording fees: Buyer pays all recording fees except those needed to clear the seller's title
• Notary fees: Each party pays their own

Common Buyer Closing Costs

Loan-Related Fees

• Loan origination fee: Typically 0.5 to 1 percent of the loan amount, charged by the lender for processing your mortgage
• Appraisal fee: Usually $500 to $800 on Oahu, required by the lender to confirm the property value
• Credit report fee: A small charge for pulling your credit history
• Prepaid interest: Interest on your mortgage from the closing date to the end of that month

Title and Escrow Fees

• Title insurance (buyer's share): Approximately $1,500 to $1,800 for the buyer's 40 percent portion on a typical Mililani purchase
• Escrow fee (buyer's share): Approximately $1,600 to $2,000 for the buyer's 50 percent portion
• Attorney and recording fees: Approximately $400 to $600

Prepaid Items and Reserves

• Homeowners insurance: Typically one year paid upfront plus two months in escrow reserves
• Property taxes: Prorated from the closing date, plus escrow reserves
• Mortgage insurance premium: If applicable, the first year's premium plus escrow reserves for PMI

Property-Specific Fees

• Home inspection: $300 to $850 depending on property type, usually paid before closing
• HOA transfer fee: If the property is in a community association
• Prepaid maintenance fee: Prorated HOA or association dues

VA Loan Considerations

For military buyers using a VA loan, there are restrictions on what fees the buyer can pay. Many costs that conventional buyers cover are either waived or must be paid by the seller or lender on VA transactions. The VA funding fee is a notable cost, ranging from 1.25 to 3.3 percent of the loan amount, though it can be rolled into the loan. Disabled veterans may be exempt from the funding fee entirely.

How to Reduce Your Closing Costs

• Negotiate seller credits: Ask the seller to contribute toward your closing costs as part of your offer
• Shop lender fees: Compare loan estimates from multiple lenders to find the best rates and lowest origination costs
• Ask about lender credits: Some lenders offer credits in exchange for a slightly higher interest rate
• Review the closing disclosure carefully: You will receive this document at least three business days before closing so you can identify any unexpected charges
• Choose your own service providers: You may be able to select your own title company or inspector to save on costs

What to Expect at Closing

In Hawaii, closings are handled through an escrow company. You will sign your loan documents, transfer funds, and the escrow company will record the deed with the Bureau of Conveyances. The entire escrow process typically takes 30 to 45 days from contract acceptance. Your real estate agent and lender will guide you through every step so you know exactly what to bring and what to expect on closing day.

Get Expert Guidance

Understanding closing costs is key to budgeting for your first home. The Kristy and Austin Home Group helps first-time buyers in Mililani navigate every financial detail of the purchase process. We can connect you with trusted lenders, explain your costs line by line, and negotiate on your behalf. Reach out today to start planning your path to homeownership.