Alabama

Closing costs in Alabama: what buyers and sellers pay

Alabama's closing taxes are set by law: $0.50 per $500 deed tax and $0.15 per $100 mortgage tax. On a $250,000 Birmingham sale with a $200,000 loan, $550.

Checked on against the official sources listed at the bottom of the page.

In short

No official source gives a “typical” Alabama closing-cost percentage, so add the costs line by line. The state fixes two taxes: a deed tax of $0.50 per $500 of price (Code of Alabama § 40-22-1) and a mortgage tax of $0.15 per $100 borrowed (§ 40-22-2). On a $250,000 sale with a $200,000 loan, those two taxes are $250 and $300.

Why there is no single “typical” total

Some costs are set by government: the deed and mortgage taxes, and county recording fees. Others are set by private companies: lender charges, title insurance premiums, inspections, surveys and brokerage compensation. Your total depends mostly on your loan, your contract and your closing date.

Two federal forms show the variable pieces. The lender must give you a Loan Estimate within three business days of receiving your application, and must give you the Closing Disclosure at least three business days before closing (Consumer Financial Protection Bureau). For a walk-through of each line, see closing costs explained.

Line by line

Deed tax. $0.50 for each $500 or fraction of the price (§ 40-22-1). The statute does not say who pays, so the contract decides. Details are on our Alabama transfer tax page.

Mortgage tax. $0.15 for each $100 or fraction of the initial debt (§ 40-22-2). It is paid when the mortgage is recorded, and your Closing Disclosure shows the amount.

Recording fees. The Probate Court of Jefferson County charges $16 for the first page and $3 for each additional page, per its schedule effective June 1, 2012, still posted in October 2026. A statute adds an $11 indexing and filing fee on each instrument recorded in Jefferson County (§ 45-37-84.43). The court’s schedule does not mention the $11 fee, so confirm it with the court.

Title insurance. Alabama does not publish one state premium chart. Under § 27-25-6, each title insurer files its own schedule of rates with the insurance commissioner and may charge only its filed rates. The statute bars rebates and forbids a rate filing that allows negotiation or bidding of the premium. Ask the title company for the filed rate for your price. No official source read for this article gives a typical premium.

Lender charges. Origination, appraisal, credit report and underwriting fees are set by the lender and its vendors. Compare them across lenders on the standard Loan Estimate. See home appraisal cost.

Inspection, survey, attorney. These fees are set by each provider. See home inspection cost, land survey cost and real estate attorneys in Alabama.

Prepaids and prorations. Property taxes become due on October 1 and are delinquent after December 31 (Alabama Department of Revenue). How it is prorated at closing is set by the contract. If your lender requires a tax and insurance reserve, it funds your escrow account. See Alabama property tax.

Who pays what in Alabama

CostWho pays by law
Deed taxNot stated in § 40-22-1; set by contract
Mortgage taxNot stated in § 40-22-2; shown on the Closing Disclosure
Recording feesNot stated in the court schedule; set by contract
Title insuranceFiled rates fixed by § 27-25-6; who pays is set by contract
Lender chargesSet by the lender; the borrower is billed
Brokerage compensationNegotiable; see real estate commission

Worked example in Birmingham

This is an example, not a quote. It assumes a $250,000 home in Jefferson County, a $200,000 loan, a 3-page deed and a 15-page mortgage (page counts assumed). Only the lines fixed by law are calculated.

LineRuleAmount
Deed tax500 units × $0.50$250.00
Mortgage tax2,000 units × $0.15$300.00
Recording the deed$16 + $3 × 2, plus $11 indexing$33.00
Recording the mortgage$16 + $3 × 14, plus $11 indexing$69.00
Subtotal of fixed lines$652.00
Title premium, lender charges, inspection, survey, prorationsSet by each providerSee your Loan Estimate and title quote

The deed and mortgage taxes alone come to $550. For the Birmingham market, see the Birmingham guide.

Frequently asked questions

How much are closing costs in Alabama?

No official source gives a typical percentage. The fixed pieces are the deed tax ($0.50 per $500), the mortgage tax ($0.15 per $100) and recording fees. Lender and title charges vary, so rely on your Loan Estimate.

Who pays the deed tax in Alabama?

The statute does not say. The sales contract and closing statement assign it.

Can I shop for title insurance in Alabama?

Premiums must follow the insurer’s filed rates, and the statute forbids bidding the rate (§ 27-25-6). You can still compare insurers and the other fees on the closing statement.

When will I know my exact closing costs?

You receive a Loan Estimate within three business days of applying, and the Closing Disclosure at least three business days before closing (CFPB).

Does Birmingham charge its own transfer tax?

The Jefferson County Probate Court’s schedule lists only the state deed and mortgage tax rates and shows no city or county transfer tax.

Compare with the other states: Closing costs by state.

More Alabama guides

Sources

Alabama · All states · Federal guides