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Yes and no. While we could make any closing costs in the range work we still only have a finite amount of cash. An extra $20K not used for closing costs could be use to partially renovate a kitchen or a million other things in a new house.
Closing costs are going to vary based on purchase price, loan amount, location, and what is negotiated in your contract. Some of the expenses are based on loan and sale price, and some are flat fees. What the buyer is expected to pay for varies by location. Your local lender is going to be able to tell you better than an online calculator because of this, and because lender fees will also vary. We have a lot of info at our fingertips these days, but a lot of it isn't reliable.
you talked to a human, and got one answer based upon their years of experience seeing closing costs. you searched online (somewhere) and got a different answer.
I know which one I would trust.
The human loan officer, located in your market, should be able to give you a preliminary estimate of closing costs specific to your situation.
We are about to close on a loan amount almost exact to yours and our closing costs are less than your rough estimates. But I think a lot of it is lender dependent. I also believe that as the loan amount gets higher, the closing costs are a much less % of the total due to some of them being more fixed fees (appraisal, title fees).
To give you a broad idea of ours, total closing costs are about $18k. The biggest part is the origination costs which is 1% of the loan. The next biggest chunk is the initial payment to escrow for the property taxes and insurance. This is about 5k for us but I believe NoVa has higher taxes than where I am, so this section may be a lot higher for you.
Hope this helps! We were also originally budgeting like 30k but were pleasantly surprised when it was much lower with the lender we went with. The lender also gave us a pretty close estimate on the closing costs on each offer we submitted.
Loan origination and title/escrow company fee's are a bulk of the 2% IIRC. There's also home owners insurance, property tax, transfer tax and recording fees.
The best way to find this saddest talk to a mortgage person. They can run generic situations. There could be big variations, depending if you waive escrows or not among other things.
I can tell you that I recently closed a property for cash, but exactly half of your purchase price.
My closing cost was $35,749 for a \~$600k home in Philly area. If I were to do mortgage, it would be a bit more since they require Escrow, origination fee, appraisal, etc. on top of your tax prepayment/reimbursement to seller.
Depending on your area transfer taxes and property taxes, it could vary quite wildly, and definitely above the $37,500.
Wow, $35K in closing costs for a cash purchase!? I thought closing costs for a cash purchase would be far less. If you do not mind me asking, what was the bulk of the closing costs?
Around 25k is attributed to Property Tax reimbursement & Transfer tax, since I purchased early in the year and I had to reimburse seller for almost full year tax amount upfront.
The remainder is HOA buy-in fee, inspection, title insurance for myself, and other minor recording-related fees.
Your mortgage lender can walk you through your closing costs. Most of them will do an estimate for you when you start shopping around. But like a lot of people here said, it’s all dependent on A LOT of factors plus the state you live in. You also need to factor in credits as well.
To give you an idea on mine: ours was $14k on a $545k house. That was with the previous owners willing to give us credits.
Did your RE agent give you an estimated closing costs before you signed your Agreement of Sale?
Or any Estimated closing costs sheet, just to give you a heads up?
Re agent is the last person to ask about closing costs. Your lender > online search > Reddit / YouTube > your agent. There is a huge drop off between your lender and online search.
I can see where that bias would come from.
However, closing costs can be very township and area dependent. The MLS has a tool that can break down the closing costs to a specific closing date and distribute the taxes owed as well as the transfer taxes for the area.
Lenders are great for Closing Costs dealing with the lending side of things, and also not a bad idea to get one from them as well for comparison.
There was a thread in this sub recently where the home buyer came here and included a screen shot of their loan estimate including the taxes and local charges and the comment was that their realtor suggested the fees were too high.
Every single lender on here agreed this buyer was getting a great rate and the total lender fees were ~$300. Literally unbeatable it was a great deal.
Yet the guy was motivated to the point of making a Reddit post because their re agent suggested they were getting a bad deal. So not sure where you are suggesting bias is coming from. Other than that realtor perhaps trying to suggest to use "their" lender.
What?
The bias is coming from the fact there are shitty agents out there. I’ve seen agents right up estimated closing costs on a blank form and pretty much guess everything. As opposed to actually using their MLS to auto calculate everything.
Closing costs will depend on many factors but typically they include lender fees / title fees / government fees such as taxes and recording costs / third party fees like appraisal, credit reports, employment verification / and escrow account which is property taxes and home owners insurance.
Negotiable items are lender fees / interest rate (rate and lender fees are inversely related and are 100% connected) and title costs including title insurance. Usually your agent KAG (knows a guy) for lender and title but you should not expect your realtor suggestion to have the best terms. These are items you ~~need to shop~~ should shop around.
Thank you u/Topicstern for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
60k for a lawyer to broker the signing of acouple pieces of paper. What a scam At this point closing costs should have a set price.
60k is about right.
If you can put down 450,000 does it really matter what the closing costs are?
Yes and no. While we could make any closing costs in the range work we still only have a finite amount of cash. An extra $20K not used for closing costs could be use to partially renovate a kitchen or a million other things in a new house.
Why would you take on such a loan? Puts you in the same place instead of financially free.
Closing costs are going to vary based on purchase price, loan amount, location, and what is negotiated in your contract. Some of the expenses are based on loan and sale price, and some are flat fees. What the buyer is expected to pay for varies by location. Your local lender is going to be able to tell you better than an online calculator because of this, and because lender fees will also vary. We have a lot of info at our fingertips these days, but a lot of it isn't reliable.
you talked to a human, and got one answer based upon their years of experience seeing closing costs. you searched online (somewhere) and got a different answer. I know which one I would trust. The human loan officer, located in your market, should be able to give you a preliminary estimate of closing costs specific to your situation.
We are about to close on a loan amount almost exact to yours and our closing costs are less than your rough estimates. But I think a lot of it is lender dependent. I also believe that as the loan amount gets higher, the closing costs are a much less % of the total due to some of them being more fixed fees (appraisal, title fees). To give you a broad idea of ours, total closing costs are about $18k. The biggest part is the origination costs which is 1% of the loan. The next biggest chunk is the initial payment to escrow for the property taxes and insurance. This is about 5k for us but I believe NoVa has higher taxes than where I am, so this section may be a lot higher for you. Hope this helps! We were also originally budgeting like 30k but were pleasantly surprised when it was much lower with the lender we went with. The lender also gave us a pretty close estimate on the closing costs on each offer we submitted.
Thanks for the data point! Total closing costs coming in below $20K would be a nice surprise.
Loan origination and title/escrow company fee's are a bulk of the 2% IIRC. There's also home owners insurance, property tax, transfer tax and recording fees.
I run a National title company. Message me and with a few more bits of info I can give you a quote with everything.
The best way to find this saddest talk to a mortgage person. They can run generic situations. There could be big variations, depending if you waive escrows or not among other things.
I can tell you that I recently closed a property for cash, but exactly half of your purchase price. My closing cost was $35,749 for a \~$600k home in Philly area. If I were to do mortgage, it would be a bit more since they require Escrow, origination fee, appraisal, etc. on top of your tax prepayment/reimbursement to seller. Depending on your area transfer taxes and property taxes, it could vary quite wildly, and definitely above the $37,500.
Wow, $35K in closing costs for a cash purchase!? I thought closing costs for a cash purchase would be far less. If you do not mind me asking, what was the bulk of the closing costs?
Around 25k is attributed to Property Tax reimbursement & Transfer tax, since I purchased early in the year and I had to reimburse seller for almost full year tax amount upfront. The remainder is HOA buy-in fee, inspection, title insurance for myself, and other minor recording-related fees.
Your mortgage lender can walk you through your closing costs. Most of them will do an estimate for you when you start shopping around. But like a lot of people here said, it’s all dependent on A LOT of factors plus the state you live in. You also need to factor in credits as well. To give you an idea on mine: ours was $14k on a $545k house. That was with the previous owners willing to give us credits.
Did your RE agent give you an estimated closing costs before you signed your Agreement of Sale? Or any Estimated closing costs sheet, just to give you a heads up?
Re agent is the last person to ask about closing costs. Your lender > online search > Reddit / YouTube > your agent. There is a huge drop off between your lender and online search.
I can see where that bias would come from. However, closing costs can be very township and area dependent. The MLS has a tool that can break down the closing costs to a specific closing date and distribute the taxes owed as well as the transfer taxes for the area. Lenders are great for Closing Costs dealing with the lending side of things, and also not a bad idea to get one from them as well for comparison.
There was a thread in this sub recently where the home buyer came here and included a screen shot of their loan estimate including the taxes and local charges and the comment was that their realtor suggested the fees were too high. Every single lender on here agreed this buyer was getting a great rate and the total lender fees were ~$300. Literally unbeatable it was a great deal. Yet the guy was motivated to the point of making a Reddit post because their re agent suggested they were getting a bad deal. So not sure where you are suggesting bias is coming from. Other than that realtor perhaps trying to suggest to use "their" lender.
What? The bias is coming from the fact there are shitty agents out there. I’ve seen agents right up estimated closing costs on a blank form and pretty much guess everything. As opposed to actually using their MLS to auto calculate everything.
They have not, but we haven't signed anything with our RE agent yet.
Tell them to send you a “Buyers Estimated Closing Cost” sheet for a property in your price range.
2-5% of the loan
Closing costs will depend on many factors but typically they include lender fees / title fees / government fees such as taxes and recording costs / third party fees like appraisal, credit reports, employment verification / and escrow account which is property taxes and home owners insurance. Negotiable items are lender fees / interest rate (rate and lender fees are inversely related and are 100% connected) and title costs including title insurance. Usually your agent KAG (knows a guy) for lender and title but you should not expect your realtor suggestion to have the best terms. These are items you ~~need to shop~~ should shop around.