• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Mortgage closing costs

iamwiz82

iamwiz82

Lifer
Can someone give me a good estimate on closing costs? I'm looking at a relatively cheap mortgage, however the closing costs seem high, to me.

They are estimating the closing to be upwards of 4% of the mortgage, or about $5,000 :Q
 
Originally posted by: iamwiz82
Can someone give me a good estimate on closing costs? I'm looking at a relatively cheap mortgage, however the closing costs seem high, to me.

They are estimating the closing to be upwards of 4% of the mortgage, or about $5,000 :Q
Click to expand...

I just closed on my house and the closing costs were a little more than $5000
 
Originally posted by: iamwiz82
Can someone give me a good estimate on closing costs? I'm looking at a relatively cheap mortgage, however the closing costs seem high, to me.

They are estimating the closing to be upwards of 4% of the mortgage, or about $5,000 :Q
Click to expand...

does this include all your property taxes for a year/ home owners insurance for a year, etcs? mine was baout that high
 
i have heard that they can range from 3000 to 5000 so... i dunno. does it just depend on the mortgage co you go through?
 
Originally posted by: Ameesh
Originally posted by: iamwiz82
Can someone give me a good estimate on closing costs? I'm looking at a relatively cheap mortgage, however the closing costs seem high, to me.

They are estimating the closing to be upwards of 4% of the mortgage, or about $5,000 :Q
Click to expand...

does this include all your property taxes for a year/ home owners insurance for a year, etcs? mine was baout that high
Click to expand...

this includes prorations for the taxes for a few months and then the winter taxes as well.
we have to pay our own house ins for the first year and then it is escrowed.
the thing that sucks is that we wont even know the exact amount until the day before closing.
and that does not include a thorough home inspection or an appraisal either
 
All places charge different money for closing costs. Basically your closing costs have a bunch of hidden charges to make up for you getting a cheaper APR. I closed on my house last Wednesday....here's what I found out when I was shopping for a mortgage....I went to three kinds of institutions:

1. Mortgage Broker: Estimated closing costs on $100,000 at 6% 30 Year Fixed $5000
2. Bank: Estimated closing costs on $100,000 at 5.5% 30 Year Fixed $4000
3. Credit Union: Estimated closing costs on $100,000 at 5.00% 30 Year Fixed $2100

Obviously I went with my credit union. I was 4 points away from getting 4% with my credit rating.
 
Originally posted by: iamwiz82
Can someone give me a good estimate on closing costs? I'm looking at a relatively cheap mortgage, however the closing costs seem high, to me.

They are estimating the closing to be upwards of 4% of the mortgage, or about $5,000 :Q
Click to expand...

That's about right.
 
Originally posted by: tranquilflow
varies a lot & is a percentage of property value
Click to expand...

It's not a percentage of the property value.
Some of the costs will be higher for a more expensive house (tax, insurance, etc.) but many of the closing costs are set fees that are the same regardless of the home value.
 
also, you will often find the estimated closing and the actual closing costs to be wide apart as less scrupulous outfits draw you in and then sock it to you.
 
like everybody else said, it varies alot.

there are loans with NO closing costs (you pay a slightly higher APR) - if you're just starting out, this might be an attractive option. i know well's fargo does these - give them a call.

whatever you do - make SURE you get at least THREE quotes from different lenders. our buyer's agent wasn't very forthcoming and we ended up taking it in the ass on interest when we could have easily gotten any one of a number of different loans that would have saved us a couple hundred a month.

needless to say, she doesn't get any more referalls from us (and we didn't get so much as a thank you card for the two people we DID refer to her)...
 
there are loans with NO closing costs (you pay a slightly higher APR) - if you're just starting out, this might be an attractive option. i know well's fargo does these - give them a call.
Click to expand...
As a first time home buyer, I didn't go this route because I lost a lot on the APR. They tend to put you in a higher-risk category and you'll actually pay out a lot more in the end. If you don't care about building equity in your home and plan on selling it quickly, this isn't a bad option. I would look at it as a last resort because some credit unions can hook you up. I'm a member of 3 credit unions and checked with all of them for deals....they beat all of the banks and REALLY beat the mortgage brokers on closing costs.
 
My original closing costs were including a lot of items, including some not necessarily to be included. Still, closing was about $7800 on a $250K mortgage. The total amount can vary a lot depending on what the loan origination percentage is, etc.
 
My concern is that they want us to pay $1000 proration for taxes for the year, why would we pay that when total taxes are only $1600 a year? Wouldn't we only pay the prorated amount for the last few months of this year?
 
ours was $10000 for a $264k loan in NY. That's about 4% for us too then.

(Hey when'd you hit hawaii ? I gotta get my pics up soon...)
 
Originally posted by: iamwiz82
My concern is that they want us to pay $1000 proration for taxes for the year, why would we pay that when total taxes are only $1600 a year? Wouldn't we only pay the prorated amount for the last few months of this year?
Click to expand...

that's for the escrow account. It never works out perfectly and your escrow account it periodically reviewed.

My opinion? Why let another company use your money for free with NO interest. Don't get an escrow and use a savings account wth interest to cover insurance/taxes.

no more free money for them, and interest for YOU! All you should pay is the title insurance and various fees during closing. 1000-2000 bucks.
 
Originally posted by: spidey07
Originally posted by: iamwiz82
My concern is that they want us to pay $1000 proration for taxes for the year, why would we pay that when total taxes are only $1600 a year? Wouldn't we only pay the prorated amount for the last few months of this year?
Click to expand...

that's for the escrow account. It never works out perfectly and your escrow account it periodically reviewed.

My opinion? Why let another company use your money for free with NO interest. Don't get an escrow and use a savings account wth interest to cover insurance/taxes.

no more free money for them, and interest for YOU! All you should pay is the title insurance and various fees during closing. 1000-2000 bucks.
Click to expand...

I guess you dont have a mortgage? you wont find a bank that will play by YOU rules. do you know the golden rule of banking and real estate? it is whoever holds the gold, makes the rule. If you want money from anyone, you'd better play by their rules.
 
Originally posted by: richardycc
Originally posted by: spidey07
Originally posted by: iamwiz82
My concern is that they want us to pay $1000 proration for taxes for the year, why would we pay that when total taxes are only $1600 a year? Wouldn't we only pay the prorated amount for the last few months of this year?
Click to expand...

that's for the escrow account. It never works out perfectly and your escrow account it periodically reviewed.

My opinion? Why let another company use your money for free with NO interest. Don't get an escrow and use a savings account wth interest to cover insurance/taxes.

no more free money for them, and interest for YOU! All you should pay is the title insurance and various fees during closing. 1000-2000 bucks.
Click to expand...

I guess you dont have a mortgage? you wont find a bank that will play by YOU rules. do you know the golden rule of banking and real estate? it is whoever holds the gold, makes the rule. If you want money from anyone, you'd better play by their rules.
Click to expand...

yes, I have a 1st mortgage for 80%, second for 10% on 250K home.

I pay no escrow and manage the account myself paying taxes at the end of the year and housing insurance every six months along with auto. you don't HAVE to have an escrow - its just a way of giving the bank an interest free loan on your OWN money.

this way my P&I payment is very small.

I'm sure you can do the math on the interest I'm getting by not giving it to the bank and instead paying who I should directly (namely the county and my insurance company) and since the big chunk is taxes I get a full year of interest on the taxes.

not bad.

I believe that if one truly tries to avoid throwing money away one can build wealth. This is just one such tactic of not throwing money away. Giving the government an interest free loan on your TAX refund would be the biggest waste of money there is.
 
Originally posted by: spidey07
Originally posted by: richardycc
Originally posted by: spidey07
Originally posted by: iamwiz82
My concern is that they want us to pay $1000 proration for taxes for the year, why would we pay that when total taxes are only $1600 a year? Wouldn't we only pay the prorated amount for the last few months of this year?
Click to expand...

that's for the escrow account. It never works out perfectly and your escrow account it periodically reviewed.

My opinion? Why let another company use your money for free with NO interest. Don't get an escrow and use a savings account wth interest to cover insurance/taxes.

no more free money for them, and interest for YOU! All you should pay is the title insurance and various fees during closing. 1000-2000 bucks.
Click to expand...

I guess you dont have a mortgage? you wont find a bank that will play by YOU rules. do you know the golden rule of banking and real estate? it is whoever holds the gold, makes the rule. If you want money from anyone, you'd better play by their rules.
Click to expand...

yes, I have a 1st mortgage for 80%, second for 10% on 250K home.

I pay no escrow and manage the account myself paying taxes at the end of the year and housing insurance every six months along with auto. you don't HAVE to have an escrow - its just a way of giving the bank an interest free loan on your OWN money.

this way my P&I payment is very small.

I'm sure you can do the math on the interest I'm getting by not giving it to the bank and instead paying who I should directly (namely the county and my insurance company) and since the big chunk is taxes I get a full year of interest on the taxes.

not bad.

I believe that if one truly tries to avoid throwing money away one can build wealth. This is just one such tactic of not throwing money away. Giving the government an interest free loan on your TAX refund would be the biggest waste of money there is.
Click to expand...



yes, you dont HAVE to have an escrow account, but how much is your time worth and the peace of mind knowing that your taxes are paid on time, and have the money ready to pay when it is due? remember most americans live from paycheck to paycheck. My bank pays me 0.25% interest, assuming your tax is at $2000, thats only $5 in interest a year. Most people would gladly not take the $5 gain in interest for the convenience of having an escrow account. And you are getting a 80% mortgage, why? because the bank/freddie mac/fannie mac said so, or else you will have to pay PMI, so you are still playing by THEIR rules.
 
I'm just saying that 2% is 2%.

I found that ever since I started paying attention to my money I'm starting to build substancial wealth. Found about 4000 dollars a year more money, just by changing things around. got rid of PMI, did own escrow, max out my tax deductions, take advantage of all charity deductions that I can, etc.

Sure its not for everybody, but its the mindset of "make your money make more" that helps.

I couldn't imagine living paycheck to paycheck. That would be very stressful.

anyhoo, for a first time home buyer escrow probably makes sense. Just realize that it is an interest free loan to the bank.
 
Originally posted by: Scarpozzi
All places charge different money for closing costs. Basically your closing costs have a bunch of hidden charges to make up for you getting a cheaper APR. I closed on my house last Wednesday....here's what I found out when I was shopping for a mortgage....I went to three kinds of institutions:

1. Mortgage Broker: Estimated closing costs on $100,000 at 6% 30 Year Fixed $5000
2. Bank: Estimated closing costs on $100,000 at 5.5% 30 Year Fixed $4000
3. Credit Union: Estimated closing costs on $100,000 at 5.00% 30 Year Fixed $2100

Obviously I went with my credit union. I was 4 points away from getting 4% with my credit rating.
Click to expand...
Most likely all places had about the same closing cost - our bank was just a couple hundred. But, and here is the big 'but': there are a ton of other things that are considered in closing as well. For example, I was required to get home-owners insurance. I could have paid for it out of my pocket, but I just said to add it to the closing cost and that is one less check I have to write (plus it gave me a couple more weeks to hold the money). There are tons of things like that. The broker, bank, and credit union probably just had different assumptions about what you want to pay yourself vs pay at closing time.
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top