Subscribe Feed (RSS)What Does It Cost to Buy A House?
December 8th, 2008 by Casey .That’s a rather broad question, and one for which there is no simple answer. But there are certain costs associated with buying that can be pinned down a bit.* [A good lender will provide you with a "Good Faith Estimate" for you to let you know, line by line, what your costs will be. If you don't receive one of these, change lenders.]
In the Greensboro area some costs you can expect to pay, as a buyer are:
- Credit Report Fee -$50 (usually paid at the time of loan application)
- Appraisal Fee -$350 (usually paid at loan application)
- Home Inspection -$325 (not required, but always recommended, usually paid at the time of the inspection)
- Pest Inspection – $60
- Attorney’s fee – $450
- Loan Origination Fee - 1% of mortgage amount (usually)
- Flood Certification Fee – $20
- Home Owner’s Insurance – $500 (paid 1-year in advance, at closing)
- Commitment Fee – $400
- Tax Service Fee – $70
These costs are in addition to your down payment and any prepaid property taxes you will be charged. And these are just estimates for what is customary in our market.
What is NOT customary is something I heard earlier today where a buyer (not represented by anyone in our company) paid $1000 for an attorney fee and $1500 in commitment fee. Outrageous. The lender told the buyer he had to use this particular attorney (“He does all our closings”).
Clearly, the lender and the attorney have a real back-scratching relationship going on. It makes me mad just thinking about it.
$1000 for an attorney?? In this area? $1500 commitment fee??!!!!
Please, please, please ask questions. And you are not obligated to use any attorney you don’t want to if you are the one paying the fee. If a lender can’t manage to get a loan closed unless “Dewey Cheatum & Howe” handles things, then move on down the road. There are too many excellent lenders out there who are anxious for your business to waste your time and money on one who thinks they’re in the driver’s seat in the transaction.
Grrr.. I’m angry on behalf of that buyer, whoever he is.
Tags: attorney fee, closing costs, inspection cost, loan origination fee
Very nice to have a list like this. I can say that, having just bought a house, one of the scariest parts was wondering what charges were legit and which weren’t. All of them for us were above board, but the numbers can get so big that you wonder!
When we bought our first house, way back in 1981, before the advent of “Buyer Agency”, that agent saw us coming. We never regretted becoming homeowners, but we know that we paid more than we should have and spent money on fees that were unnecessary. That’s one reason I like working with 1st time buyers. I still remember the feeling of being alone. And that’s just not necessary these days.
My husband and I are getting ready to close on a house next week that we had gotten in a forecloser. We are getting it for $48000 and yet our mortage lender can’t let us know a ball park figure that we need for closing. We are First time home buyers and feel that we are being screwed in some way or another. Thanks 4 listening.
First, congratulations on getting your first home! That is great and be sure to take advantage of the $8000 home buyer’s credit when tax time comes.
Second, WHAT? You’re lender isn’t giving you an estimated figure for closing yet? Unacceptable. And in violation of RESPA (Real Estate Settlement Procedures Act), which states a borrower must be given a Good Faith Estimate within 3 days of making a loan application.
If you haven’t already done so, lean on the lender. If that doesn’t work, speak to their manager. If you’re working with a real estate agent, ask for her to him to follow up with the lender as well. Get as many “squeaks” in your wheel as possible. Contact the closing attorney and ask if they’ve received the closing package from the lender yet (doubtful if the closing isn’t until next week, but you can ask.) If so, the attorney can tell you how much you’ll need for closing.
Feel free to contact me directly if you feel there is any information I can share that may help.
Hi me and my wife are trying to buy a home for 102,000 how much should we pay in closing
The amount really will vary depending on the type of loan, which day in the month you close (closer to the last business day and you pay less in per diem interest), how much will be escrowed for property taxes and homeowners insurance, etc., But a VERY loose estimate is about 3% of the financed amount. So, about $3060 in closing costs. But a good lender should be able to nail that figure down for you, particularly if the property and purchase contract details have been determined.