What would estimated closing cost be.?

Question

I am purchasing a home in Florida, financing a little over 200k, 10/30 Interest only loan. I am trying to get an idea of what closing cost would be. Also, how is the amount calculated. How does the taxes and insurance come into play. Is that an amount I pay at the closing? I'm a first time buyer, so this is new to me.

Answer 1

I'm in Texas, but should be similar to Florida. The maojrity of your closing costs are calculated by your lender. There are fees associated with providing you the loan(s). The lender usually charges an origination fee (1-2% of loan amount), application fee, lending fee, underwriting fee, and various other fees they feel like charging you. Keep in mind, you might be able to negotiate some of these fees with your lender.

The taxes will be prorated through the date you Close on the home. For example, if you Close on August 1st, the seller will be responsible for paying the taxes through August 1st, and you'll be responsible for paying from 8/1 through Dec. 31st. Since taxes for the current year aren't actually due until Jan 30 of next year, the title company will show a debit on the seller side of the Closing docs, and a credit on your side. This credit will reduce the amount you have to bring to Closing, however, it's as if they're giving you the money, so you'll be responsible for the entire tax bill come the end of the year.

Some lenders require you to have an escrow account, which is an account held by a 3rd party into which you make payments toward your taxes and insurance. If your taxes are $600/yr, the lender will tack an extra $50/mo onto your principal and interest payment, $50 of which will be held in the escrow account for year end taxes. Same for Hazard Insurance. The number of months each lender requires you to pay at Closing varies based on many factors, but it's usually anywhere from 3 months-12 months, therefore, at Closing, you will be expected to provide a large lump sum of cash into your escrow account. That doesn't stop them from collecting monthly, it just ensures you have a surplus in the account. In this way, your mortgage payment can vary from year to year, depending on whether your taxes and insurance increase. Your lender will notify you annually advising you of a payment change.

At Closing, you'll also have to pay your portion of the title policy, this could range from $200-$2000 depending on the price of your home and whether or not the seller agreed to pay for the owner's title policy. Even if they agreed to pay that part, you'll still have the lender's policy to pay for, which is drastically less.

In addition to all these costs, you'll have expenses such as courier fees, attorney's fees, documentary fees, most of these fees will be small, but they add up.

I'm happy to provide additional information, but this just about covers it. The only other charges would be related to Homeowner's Association Fees -- those are usually collected up front too.

Good luck, and congrats on your first home!

Answer 2

You should receive an estimate within 72 hours of applying for a loan. If you haven't gotten that then you need to call the loan coordinator or broker. The alternative is the title company handling the closing. Just prior to closing you will get a revised estitmate of the settlement amounts for your review.

Closing cost will include points, attorney's fees, prepaid items like insurance & taxes, recording fees, document fees, courier fees, etc. In a purchase, normally you don't roll the cost into the loan as you can for a refinance. Unless otherwise contracted for, the seller will be paying the majority of closing cost and they will come out of the settlement funds due and anything that is debited from you as the buyer, you will write a check for.

I would call the loan broker to find out where your estimate is.

Answer 3

In addition top contacting your loan broker about their fees, contact the escrow closing agent / attorney / title company handling the transaction for their fees as well.

Each county/state and contract is different so you'll need to consult your realtor or contract to find out who is paying what when it comes to closing costs ties to the title/escrow portion.

The taxes are based on the sales price, in most cases. You can contact the county assessor and they can give you an idea of the percentages they use (for instance in No. Calif, we generally use a 1.25 to 1.5% of the sales price as an estimate to determine what taxes might be).

Contact your insurance agent, or several agents if you don't have one, and get a quote. You'll need several points of information such as when the house was built, upgrades, size, etc., so be prepared.

Taxes are usually prorated depending on when the close is. Sometimes you'll receive a credit from the sller and sometimes you will credit them. Insurance should be paid a year in advance through the closing agent.

Your realtor should be able to do much of this for you. Get them to earn their commission. Tell them you need to know what the title/closing fees will be and an estimate of taxes, as well as any costs you will be incurring for inspections, etc.

Remeber too, some loan/broker fees are NEGOTIABLE! If a fee sounds too high or there are too many junk fees, tell them no or renegotiate it. They know they're not the only lending fish in the sea and you have lots of choices if you're not happy with their fees.

Good luck :)

Answer 4

Go for none! Unless you buying down the points than you will have to pay for that.

Only you need to pay is home inspection should be around 300-400 hundred.

How to get around it. Make sure you purchase agreement states the following:

Seller to Contribute up to 6% of the buyers recurring and nonrecurring closing costs. The seller pays for all title fee, escrow fee, handling fees, junk fee from lender and so on. If you get over the amount than look at your Hud-1 statement and start asking questions.

Its a buyers market and buyers should take advantage.

Answer 5

Ask your mortgage company they can get you a better estimate, but I would say around $14,000. I think you have to pay a year and a half worth of taxes and insurance up front. Don't forget you can also apply for Sellers assist if you can't afford that.