Confused on Closing Costs on Home

Cherokeekid88

Cherokeekid88

Well-Known Member
Joined
Jun 30, 2007
Location
High Point, NC
OK, so we are 2 weeks away from closing on our house and it seems now, ish is starting to hit the fan.
first of all, we were able to get the sellers to pay $2500 in closing costs...then we started getting hit with the Appraisal fee on the house, which I thought was included in the closing costs, so we had to pay that out of pocket. I told the bank, that they could choose the attorney to do the closing because they said, they price around and get the best price...well the one they got was like $750 AND didn't have an appointment for the day of our closing (aug. 30th) which I have already taken off from work for....
So my realtor was nice enough to try and find someone else and was able to get me an attorney on the closing day for $200 cheaper.....
What I am wondering is, what all does the closing costs cover? it seems even with the sellers paying $2500 and us paying for the appraisal out of pocket, we are still gonna need another 1k to close on top of our down payment....in the beggining, it was "oh $2500 should be plenty enough"

WTF....In the beginning, we were not told of all these little charges here and there and just don't see what could costs $2500 to close on a house that is less than 150k???
We paid for the appraisal, credit reports being pulled, Inspection,DD, Earnest, etc.....

Just trying to get mentally prepared for this....I feel Like I am dealing with children....nobody at the bank can seem to give me a straight answer about anything....
 
You'll have a ton of various costs associated... escrow amounts for insurance, taxes, pmi, etc. Attorney's fees, home inspection, pest inspection, appraisal, on and on... I'd guess the typical closing cost associated with a $160K home is close to $6K not including your down payment...

Also, you should receive a good faith estimate from your bank prior to closing...
 
Subscribed...I was told anything from 1-3% (depending on negotiations) of house price would be enough for closing. And that's obviously not even touching down payment.
 
There is probably a 1% origination fee, so if you have a $150k house that is $1500 right there. Then you will have to pay your first years taxes and insurance to go into the escrow account. Not sure what your taxes/insurance are but you're looking at at least $1000 right there. There is probably some kind of processing/underwriting fees that are right at $500 from the bank too. There are also a bunch of other fees that will be littel things that add up. Title insurance, recording, reconveyance, deed, etc etc etc that will probably be like $700.

It surprised me on both my last houses at closing. This time we are budgeting more than we expect it will be and hoping for the best.
 
Where in the world did you hear "Oh 2500 should be plenty". Just the various up front costs for inspections, estimate, etc could be half or more of that.
Yes the lender should give you a Good Faith Estimate very soon. That tells you exactly what $$ is going where and how much to bring to closing, the actual closing will be pretty close to that.
And you can use whoever YOU want for title insurance (what a ripoff! but required), that can be a big one too.

... it's gonna be a big check.
 
Blaze said:
There is probably a 1% origination fee, so if you have a $150k house that is $1500 right there. Then you will have to pay your first years taxes and insurance to go into the escrow account. Not sure what your taxes/insurance are but you're looking at at least $1000 right there.
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I'm pretty sure you don't have to pay the whole year's up front, just enough to make up for what % of the year has passed so that that, plus the payments you will make before the county due date will balance out. This one is kind of strange, really you are paying the seller for what they have paid in (assuming they have) b/c you are taking their money.
 
RatLabGuy said:
I'm pretty sure you don't have to pay the whole year's up front, just enough to make up for what % of the year has passed so that that, plus the payments you will make before the county due date will balance out. This one is kind of strange, really you are paying the seller for what they have paid in (assuming they have) b/c you are taking their money.
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Both times I bought houses I paid full. When I sold my last house I got a check back for what I already had in escrow, it didn't transfer to the new owner.
 
when we closed on our first house we negotiated seller paying all closing and associated cost, it's what our agent recommended when the seller countered our first offer. She/he agreed. We paid a lil more for the house but had NO cost upfront....
 
RatLabGuy said:
Where in the world did you hear "Oh 2500 should be plenty". Just the various up front costs for inspections, estimate, etc could be half or more of that.
Yes the lender should give you a Good Faith Estimate very soon. That tells you exactly what $$ is going where and how much to bring to closing, the actual closing will be pretty close to that.
And you can use whoever YOU want for title insurance (what a ripoff! but required), that can be a big one too.

... it's gonna be a big check.
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My mortgage lender told me that on average in our price range....Closing costs is usually between $2500-3000.
 
I was looking to buy a house for 50k and closing costs were 3800. Didn't go through with it. I guess that was right.

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Cherokeekid88 said:
My mortgage lender told me that on average in our price range....Closing costs is usually between $2500-3000.
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So I could *maybe* see that from the lender's viewpoint - it will not include any of the up front things like inspections etc. Even then kind of low.
In a lot of cases the sellers pay some of the closing cost as part of the deal so that probably drives down that average.
 
Blaze said:
There is probably a 1% origination fee, so if you have a $150k house that is $1500 right there. Then you will have to pay your first years taxes and insurance to go into the escrow account. Not sure what your taxes/insurance are but you're looking at at least $1000 right there. There is probably some kind of processing/underwriting fees that are right at $500 from the bank too. There are also a bunch of other fees that will be littel things that add up. Title insurance, recording, reconveyance, deed, etc etc etc that will probably be like $700.

It surprised me on both my last houses at closing. This time we are budgeting more than we expect it will be and hoping for the best.
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this is right but the escrow. i am a loan processor. so i see closing cost all day long. i only work with refinancing tho. i believe not much different as far as closing costs except purchases have more closing costs, inspections, land survey etc.

there is origination fee, title insurance (protects you incase something comes up title search did not find), tittle search fees, signing fees, state/city deed recording fee etc. most banks do make you pay appraisal and credit card up front out of pocket. it is very rare a bank fronts this.

some banks require you to escrow some dont. if you do escrow you have to fill some of the account up depending on when your taxes and insurance are due. example if your taxes are due in 3 months you will have to put in 9 months + 2 months buffer worth of taxes.

sounds like you have a title company now but for anyone else i recommend LSI title, parent company is LPS. they are cheapest ive seen and really good customer service. I do not know if this is because of the relationship with the bank i work for but i recommend them.

buying a house is very expensive especially since they do not have the creative financing anymore. when you refinance it will be a little easier since you can usally have the loan amount higher to cover the closing costs into the loan. minus the appraisal and credit report.

you should have got a gfe already. and banks must disclose to you again if fees are higher than estimated on that gfe. you will receive the hud. you should receive it just before closing. some times a few hours. the hud will have all the terms and details of the loan and break down all the fees. the hud is much easier to read than the gfe.

hope this helps.
 
I have the feeling I'm about to be getting a run around with this type of stuff soon. Deed transfer, associated taxes, building a house, etc. I should still come out smelling like a rose on the other end of this tunnel. I suppose I'm getting lucky since I have the land as leverage and it's already got power, water, and a functional septic system and drain field. If I was going to buy a house, I wouldn't even go in to it without 20% in cash, knowing what I know now.

Good luck to you. It should all shake out in the end.
 
with most banks, you can roll the closing costs into the loan. Be sure to ask the bank about this. Depending on the appraisal and the loan and the LTV, etc., you may can do it.

home inspections are paid up front. most appraisal fees are collected at closing. yes, there will be origination fees and everything else everyone else said. Be sure to ask for the good faith estimate from the bank so you have an idea of closing costs and $$$ that you may need to bring to the table. Whatever they say to bring, multiply that by 1.5 and you should be good. That has been my experience with every property closing.
 
Damn I love my network.
We closed on 165k two years ago and closing cats were user 2000, significantly.
500 attorney, no origination, no points, title insurance was 175, we paid 20% down so no escrow at all, no pmi, I think we paid 60 for credit report and 50 in fed ex overnight fees.

I think we walked out with 1475 out of pocket.
 
They sent me a GFE in the beginning but i cannot find it to save my life....I know I put it away somewhere....the bank said they would send me another GFE with all updated info....just haven't recieved it yet.
I just hate that I've been kind of mislead throughout this whole thing and never get a response on stuff, its always asnwering a question with another question.
 
Its likely you haven't been misled, its more likely that you are just unfamiliar with the process and your lender and realtor are not giving you the info that you need for your questions.

You should pick the attorney based on recommendations from friends or family or even cold calling. If the bank or seller picks the attorney, they will pick someone they know will keep THEIR interests first. Its not usually that big of an issue, but it can be. You are paying for the attorney closing and expecting him to do some work for you, pick someone yourself.

Be sure there is no conflict of interests. Right now I'm in the middle of a significant purchase and anytime the seller of the property calls my attorney, he always directs them to contact me first and the communication should come through me as I am the client and the attorney is hired to keep their client's interest first. If there is a conflict or a prior history, the attorney is going to have to tread lightly and you will likely loose out. for a home purchase you are likely OK but there are horror stories out there. RISK MANAGEMENT is key
 
UTfball68 said:
^^^So with my impending home purchase...how do I get in your network??? Do you want a new friend??? haha
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Sure but your going to have to buy in western York county....
 
From when I bought mine last year, The realtor had a list of what the closing costs cover. You should ask your for this they should be able to tell you. Its a bunch of little stuff that adds up. I had to pay for my appraisal, home inspection, and radon inspection. The closing costs didn't cover any of this. We had it on our offer the seller pays all closing costs. I think our appraisal was around 500 maybe and inspections were 500 or somewhere around there.
 
Make sure your inspectors do a thorough job! Our home needed new drain pipe two days after moved in. Our neighbors home is on the market & under contract.they a pest management guy come by last week I assume for a termite inspection. He never entered the home. Just looked around the porch, wrote thing on his clip board & was gone in 5 minutes. You're paying for these so make sure it's being done!
 
dug a little deeper and found out that the GFE that we got did not subtract the earnest money we have paid....So after we pay our downpayment, and the sellers pick up their part of the closing costs...we will only have to put out like $200...which is totally fine with me. So all is well.
 
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