Is anyone a realtor or knows a lot about buying a house?

Question

We are in the process of looking for a house. We are approved for $200,000. It could have been more but that's the highest we wanted to go. The mortgage person sent over three estimates of closing costs and they range from $19,000-$22,000. I know people that only had to pay like $5,000 to $8,000 at closing. I'm confused why theirs was so cheap. Thanks in advance!

Answer

Lenders have to disclose all possible costs otherwise they could be subject to penalties and fines. With that being said, depending on your loan type your down payment for $200k is probably $10k. Closing costs include lenders fees, prepaids and escrow and third party fees. Third party fees are currently being estimated in your situation which is why there is such a large variation in your 3 estimates. The third party is the title company and without knowing the actual company it's hard to determine exact cost. Also, your taxes and insurance are being estimated as well. Assuming your doing a 5% down payment (anything less than 20%) your taxes and insurance are required to be paid in advance at closing. The amount will adjust accordingly when you select a property and actual taxes and insurance are calculated. Lenders prefer to estimate high because of no/zero tolerance policies the government has mandated. If they estimate too low they have to pay some costs for you and penalties/fines. Also, each lender determines their own fees. It pays to shop around. I work for a mortgage company who doesn't charge commission or processing fees and the origination charge is very low. We typically offer lower cost loans than other places. So it makes a difference who your lender is.

Answer

Was this including the down payment? Sometimes you can have seller pay closing costs or split them. It depends on the negotiation. We got an FHA loan which made the percentage of the down payment we had to pay lower. Convential loans have a higher closing cost to pay. Maybe that price was the closing cost and down payment together?

Answer

Thank you everyone. I believe that is the down payment and closing together. I still think it is high though

Answer

They will give you a good faith estimate on the closing costs and it will break everything down for you. They estimate high so you are prepared financially for it just in case. When we put an offer on our house we asked for 4.5% to be applied to our closing costs from the seller. Closing costs are 
Taxes
Title and settlement
Appraisal
Inspection
Lawyers fees 
Points (used to lower interest rate)
Insurance premium
Daily interest

Etc. they estimated ours at 18,500 but we are not paying nearly that much.

Answer

I didn't pay ANY closing costs, the seller did! That was put in the contract, fha loan. I just offered a little under asking price and for seller to pay all the closing costs.

Answer

Tip: If you get a 30-year mortgage you should try to make 13 payments a year instead of 12. You will pay your house off 7 YEARS sooner!!

Answer

Our mortgage company paid part of our closing costs with a small increase in interest rate. The sellers wouldn't pay for any of it so that's what we opted for.

Answer

They estimated ours 13k, ours ended up being 8500

Answer

We asked the lender to cover closing costs and they did.

Answer

We are currently buying and selling a home at the same time. We close on our home that we're selling Monday, we as the seller, are paying closing costs (2.5%) which is only about 2500-3000. On our new home the seller is paying 2.5% closing costs which will be around the same. I dont know why yours will be so much. What type of loan is it? It may be something to look into deeper...its way too much!

Is anyone a realtor or knows a lot about buying a house?

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