What's standard practice for closing costs?

5 years ago

Can someone please give me some advice? I'm supposed to be making my first offer on my first ever home purchase today. Our agent just contacted us and said, basically, we will be paying for closing costs but that we could include it in our offer if we went a bit higher. I'm reading everywhere that this is normally 2 to 3 percent of the purchase. The numbers I'm getting from the Realtor, who is telling me it is coming from the mortgage company, are closer to almost 4 percent. Seems like the costs just keeps going higher and higher, so I'm just wondering if this number is standard? I appreciate any advice.

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Comments (5)

Lala
5 years ago
Maybe this will be of some help. It has a closing cost calculator.

https://www.nerdwallet.com/article/mortgages/closing-costs-calculator
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fleurssauvages
Original Author
5 years ago
Wonderful, this does help. Thank you so much!
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Denita
5 years ago
last modified: 5 years ago
Don't you have a quote from your own loan officer as to the closing costs for your specific mortgage type/size on that house? Closing cost and pre-paid expenses due at closing vary from house to house based on the mortgage amount, the amount of property taxes, homeowners ins, HOA fees if applicable and other lender specific items. You should have a detailed loan estimate from your LO before making an offer so you know what your costs are for the specific home on which you are making an offer.
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midcenturymodernlove
5 years ago
I wouldn't be talking to a Realtor about any loan or closing costs. Have you chosen a mortgage company? You need to CALL (not email- they sell your info everywhere) a few known lenders in your area, and compare apples to apples. Make a list on paper of each and every cost for each company IF you have X income and X credit score. Do not let them tell you to apply first. You need to know interest rates and costs BEFORE you do that. Call at least 3 and speak to a loan rep or better, call a loan broker who does a lot of business in your area. A good one will get you the best deal, even though he takes a fee - you still come come out better. They are all taking your money.
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sushipup1
5 years ago
Who pays which closing costs tends to be very regional. It not only differs from state to state, but city by city, There are two basic kinds of closing costs, non-recurring costs, which are everything from loan origination fees to title insurance and more. Non-recurring costs are negotiable between buyer and seller. Lenders will require buyer to pay the recurring costs without seller's contribution.

Recurring costs are interest, insurance and taxes, prorated to the date of closing. If the seller has paid 6 months taxes in advance, and the buyer closes two months into that, the buyer repays the seller 4 months of taxes. Insurance can be a full year's premium, again depending on several factors. Interest is usually estimated at one month's worth, and then prorated between closing date and payment date.
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