Tennessee Closing Costs Explained: Transfer Tax, Mortgage Tax, and Title Fees

Closing costs in Tennessee generally fall into a few buckets: government taxes and recording fees, title and settlement charges, lender fees, and prepaid items. Here’s how they work for a typical Memphis-area purchase.

Tennessee recordation taxes

Tennessee charges two recording-related taxes, collected when documents are recorded at the county Register of Deeds:

• Realty transfer tax: $0.37 per $100 of the sale price or the property’s value, whichever is greater. On a $300,000 home, that’s $1,110.
• Mortgage (indebtedness) tax: $0.115 per $100 of the loan amount, with the first $2,000 exempt. On a $240,000 loan, that’s about $273.70.

Who pays each tax is set by your contract. You can estimate both with our free Tennessee transfer and mortgage tax calculator.

Title and settlement charges

• Owner’s and lender’s title insurance premiums
• Title search and examination
• Settlement or closing fee
• Endorsements required by the lender
• Recording fees for the deed and deed of trust

Lender charges

These vary by loan type and lender and may include origination fees, discount points, appraisal, credit report, and flood certification. Your Loan Estimate lists them.

Prepaids and escrows

Buyers often prepay homeowners insurance for the first year, interim interest from closing to the end of the month, and deposits into an escrow account for future taxes and insurance. Property taxes are typically prorated between buyer and seller based on the closing date.

Typical seller costs

Sellers commonly pay their mortgage payoff, real estate commissions as agreed, any agreed seller concessions, their share of prorated taxes, and items assigned to them in the contract.

Get a real estimate

Online averages are a starting point, but every transaction is different. Sure Title can prepare a free buyer estimate or seller net sheet for your specific property and contract terms.

Related: Mortgage Calculators · Memphis Title Company · FAQ

This article is general information, not legal, tax, or financial advice. Every transaction is different — consult your attorney, lender, or tax professional about your situation.