How much are closing costs ?

[TomMoser]

Originally Posted by NYC2RDU

Wouldn't closing costs be inclusive of every item needed to be paid for at the time the property changes hands? I can recall my Realtor at my first purchase preparing me for all the nickels and dimes that were likely to be bled from me.

People tend to lump them all together as "closing costs", but there are really three categories:

Closing Costs - These are the actual costs of the transaction. Things like title insurance and fees charged by your bank.

Prepaid Items - These are things that you need to pay in advance so that you can take ownership. For example, homeowner's insurance and interest from the date of closing to your first payment date.

Adjustments - These are adjustments between you and the seller. For example, you may need to reimburse the seller for the oil left in the tank. The most common one is for real estate taxes. Since they are paid in advance, you reimburse the seller for the taxes from the date of closing to the date on which they will next come due.

One more cost to keep in mind is escrow deposits. Your lender may require you to deposit with them up to one year of property taxes and hazard insurance. This can be a very big item that you should talk to your lender about at the outset.

[fallgirl]

Originally Posted by TomMoser

People tend to lump them all together as "closing costs", but there are really three categories:

Closing Costs - These are the actual costs of the transaction. Things like title insurance and fees charged by your bank.

Prepaid Items - These are things that you need to pay in advance so that you can take ownership. For example, homeowner's insurance and interest from the date of closing to your first payment date.

Adjustments - These are adjustments between you and the seller. For example, you may need to reimburse the seller for the oil left in the tank. The most common one is for real estate taxes. Since they are paid in advance, you reimburse the seller for the taxes from the date of closing to the date on which they will next come due.

One more cost to keep in mind is escrow deposits. Your lender may require you to deposit with them up to one year of property taxes and hazard insurance. This can be a very big item that you should talk to your lender about at the outset.

Tom,
I am a Realtor in Florida, but real estate in Florida is totally different than in New York. I would love to return to Long Island but only if I can swing it and have money left for renovations. We are also looking at the Carolinas. So, since we would be leaving a house in Florida built in 1990 going to a house that will probably be 30-60 years old I want to make sure I can narrow down the amount of cash I will need to pull if off. So I know you need money at closing when you are writing a million checks and hoping you have enough to cover them.

If I purchased a home for 350k put down 300 w/ taxes of 6-7500 what would the closing cost be?
I know you have attorney's fees - buyer & bank (do atty's still charge 1% ?)
I know you have title and abstract insurance (tip absolutely ridiculous)
I know you have tax proration
I know you may have credit for oil
I know there will also be miscellaneous closing fees maybe a few hundered

I am sure I have left something out. It has been a long time since I have had a closing in New York.

The thought of having to pay 10% is just nuts. It will leave me with no cash left for necessary renovations.

Any info you can give will help me make a decision.

Thanks,
Fallgirl

[NY62]

It is not 10%!!!!!!!! and tom dont forget NY state mortgage tax.theres a beaut for ya.

[NYNewbie]

Originally Posted by NYC2RDU

NYNewbie, check your math as I think it's off a little. You posted this recently in a different thread and according to my advanced math skills you estimated closing costs at less then 1%. Your property taxes half-year bill would have to be more then $10k to get to 5%.

My experience in home buying on Long Island would place the closing costs at between 5 - 7%. That would include all monies due at the time because that's what you'll need in order to close regardless of it's disbursement.

In actual closing costs, not adjustments or prepaids, I paid $2250.

1) Around $400 in fees to MadRate.com
2) $350 fee to not escrow
3) $1000 for my attorney
4) $500 for bank attorney

Sounds cheap, but the bank makes two points when they resell the loan as a security to a larger lender (WaMu).

So, there were other expenses. As I noted in my above post, it all depends on what you consider a closing cost.

[NYC2RDU]

Originally Posted by NYNewbie

In actual closing costs, not adjustments or prepaids, I paid $2250.

1) Around $400 in fees to MadRate.com
2) $350 fee to not escrow
3) $1000 for my attorney
4) $500 for bank attorney

Sounds cheap, but the bank makes two points when they resell the loan as a security to a larger lender (WaMu).

So, there were other expenses. As I noted in my above post, it all depends on what you consider a closing cost.

I hear you. But like I shared with Tom Moser, I'm of the opinion that closing costs are the total funds the buyer needs to have available in order to actually take the keys and go home. Because, in this amateurs opinion, if it's part of the money required to actually close the deal, regardless of what the professionals think, it's a closing cost.

Now granted my opinion doesn't change the fact that your answer is accurate I just think it's misleading. Not your fault mind you but the original poster should understand the big picture.

[NY62]

People listen no matter what anyone is telling you closing costs , that is all funds you need at closing or paid before closing are about 6% avg. 2500 is bull **** ca , sorry but just nys/county mortgage tax on a 300 k is.80% is 2400.

[Transpl]

[quote=TomMoser;1569798]People tend to lump them all together as "closing costs", but there are really three categories:

Closing Costs - These are the actual costs of the transaction. Things like title insurance and fees charged by your bank.

Prepaid Items - These are things that you need to pay in advance so that you can take ownership. For example, homeowner's insurance and interest from the date of closing to your first payment date.

Adjustments - These are adjustments between you and the seller. For example, you may need to reimburse the seller for the oil left in the tank. The most common one is for real estate taxes. Since they are paid in advance, you reimburse the seller for the taxes from the date of closing to the date on which they will next come due.

I have an important question. What bucket would you place the .8%mortgage tax? My relo package will pay for all traditional closing costs. Would this be classified as a closing cost or a prepaid or adjustment? I pay for any property tax, homeowners insurance, escrow, etc. Is the difference between a closing cost and a prepay/adjustment clearly defined on the HUD 1?

[Jennifer06]

There can also be also region-specific fees. We paid, at closing, a 2% transfer tax to the Pine Barrens Society preservation. (This particular 2% is tax deductible when we sell, if we sell at a profit.)

I think there may be similar preservation funds in other areas of LI. (?)

[xbure9x]

Well, I can tell you that I just paid around $15,000 at my closing in april. I don't have the breakdown in front of me of what went where, but this is what I paid on a $360,000 mortgage.

I agree that to make things easier for the average person, when you discuss "closing costs" you should be discussing all the money you will need to have with you at the closing to complete the transaction.

I honestly have no idea how people can afford these things, I was lucky, but I mean after your down payment which is hard enough to save, who has an extra $10,000-$15,000 to drop at the closing on mostly "fees" and "taxes"?