What kinds of closing costs should I expect when buying a home and how much should I expect to budget?

Answer 1

When purchasing a property I try to get by with putting as few of my dollars into the transaction as I can. Therefore when I prepare a real estate contract I always without fail add to the sales contract that the seller will pay all closing cost.

Do I always get my way, "NO" but do I always get the seller to pay for most of the closing cost "YES"

So if you place in your purchase contract that the seller to pay all closing cost then most likely you will wind up paying about 1-2%. Please oh please don't let a real estate agent talk you out of this clause.

They will tell you this is not normal. I don't do this. I ask normal for whom and it is my money not yours. Also if you want to pay for some of the closing cost out of your commission I have no problem with that either. Now which will it be?

Now if you have a credit score and can get a 100% mortgage plus the seller pays all closing cost then you are in the property for no money out of your pocket and that is a good thing.

Normal closing cost falls into two categories

#1 Non-Recurring

Things that are only gonna happen one time like the escrow, title, origination points

Most sellers will not mind paying these

#2 Recurring

Things that you are gonna pay each year like insurane, property taxes, Home owners Association fees etc



I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

Is true that with the market the way it is for real estate, the seller will pay closing just to get the property off his/her hands? Especially if they are 2 mortgages. Defiantly go with a pre approved loan prior to looking for a home. This will allow you the opportunity to know exactly how much $$ you have to purchase a home. Ask the seller if they would pay closing cost if you buy the house with 2 weeks. to answer your question, 3% of the purchase price would be about right.

Answer 3

Well, as far as the budgeting, it depends on many factors: the amount of the house, your annual income, the amount of money you put down as your down payment, and if you have your home insurance & taxes escrowed (which I STRONGLY suggest) I will go more into escrow in a bit.

As far as closing costs, that is one thing you can negotiate with the seller. You can ask to pay 1/2 the closing costs, you can ask to have the price of the house reduced and pay all of the closing costs, or you can suggest to have them pay for them. That is all part of bargaining.

Now, about escrow. We have our home insurance and taxes escrowed. I LOVE it this way because that is 2 less bills I don't have to worry about. When you have your taxes and insurance in escrow, the bank will take some of your house payment and put it into it's own kind of savings account. At the end of the year, the bank will take that money and pay your taxes and insurance for you. It won't make your house payment alot more than if you don't, but it is really worth it!

I hope this information helps!

Answer 4

Hi, I would suggest find out what kind of loan you are getting.

FHA
VA
Conventional

If you or your spouse haven't even served in the armed forces you can take away v.a. and that leaves fha or conventional which is available to everybody.

Closing costs differ with the buyers circumstances. If you are prequalified first, you can get closing costs very low than if you try to do everything at once.

It only takes a week or 2 to get prequalified and maybe only a couple hundred dollars to do so but the benefits of doing it are awesome as you get a better buy and your offer is more attractive than other buyers who aren't prequalified.

Answer 5

I always tell clients 5% of the mortgage amount. This typically turns out to be a high estimate, but the clients are ready for unexpected shortfalls.

Answer 6

expect to pay upwards of 3% of the sale price just to be safe.