Closing Costs (real estate, foreclose, rental)

[NJStealth]

How are closing costs determined? What is the amount people actually pay on closing costs these days? I am curious cause I am being asked to pay 7k for a 235k house and just wondered if thats normal

[nic529]

Sounds about right to me. Congrats and good luck!

[CuCullin]

Closing costs typically include:

Title Search/Insurance
Recording Fees (County stuff)
Mortgage App Fees
Survey Fees
Pro-rata property taxes/utility bills/interest
Appraisal Fees
Points
Legal fees

Thats about all I can think of off the top of my head - sounds about right

[MamaBee]

Sounds right...not a bad deal.

[DodgeViper01]

$7000 is pretty good on that purchase. I think I paid about $10,000 for mine on a rental property of mine at $250K. The biggest portions that effect the closing costs are the:

Attorney Fees (Vary from $500 up)
Taxes (Vary on All Properties)

Everything else like insurance, mortgage application fees, survey fees and other things of that nature are pretty standard in NJ.

[joe moving]

Here is roughly what we had:

Lawyer 850
Mortgage App - 500 was refunded on closing
Homeowners for a year paid in full - 600
Appraisal and processing fee 0
survey - 750
title insurance 2193
recording fees 330
property tax impounds - 1503 (1/4 of a year)
prepaid interest 1149
fedex 75

[RobRiguez]

your lender or attorny should be able to give you a breakdown prior to closing of what all the fees are and how much.

Mine were very similar to Joe's. Little lower on some little higher on others but worked out to be about 11k with the points and taxes. The rest of the fees should not differ much regardless of the price of the property.

Mine:

Lawyer - 650
Mortgage App - 900 not refunded
Homeowners for a year paid in full - 625
Appraisal and processing fee - 300
survey - 375
inspection - 350
title insurance - 2900
recording fees - 250
property tax - 1945 (1/4 of a year)
1 point 2500

[NJStealth]

Half of the 7000 dollar closing costs are money in escrow.. What exactly does that mean?

[Golf Doctor]

Originally Posted by NJStealth

Half of the 7000 dollar closing costs are money in escrow.. What exactly does that mean?

If your property is destroyed by a fire, the lender will have lost his collateral. Also if your taxes are left unpaid, your state can foreclose on your property in order to obtain payment and the lender could lose his collateral. Because of that the lender wants to make sure your insurance premium and property taxes are always paid. The lender collects your property taxes and your insurance premium in a special account. The money in the account will be used to pay your taxes and insurance premiums when they become due. The amount in this account is based on the estimated amount necessary to pay these obligations each year.
The Real Estate Settlement Procedures Act (RESPA) sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance and other charges related to the property. Your lender or servicer will review the amount in the escrow account annually and notify you of a shortage or excess. Any excess of $50 or more must be returned to the borrower.
RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs (for example, FHA and VA loans) or lenders may require escrow accounts as a condition of the loan.
If you have a Conventional Loan and you do not have PMI (Private Mortgage Insurance), you have the option to close your escrow account and make your own tax and insurance payments. If you have a VA or FHA loan, the maintenance of an escrow account was a condition for the funding of your government-insured loan. In this case, the escrow account cannot be waived or altered.
Your escrow account payments may include a "cushion" or an extra amount to ensure that the lender has enough money to make the payments when due. RESPA does not require lenders to maintain a cushion and limits the amount of the cushion to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments.



Hope this helps.



GD

[NJStealth]

Originally Posted by Golf Doctor

If your property is destroyed by a fire, the lender will have lost his collateral. Also if your taxes are left unpaid, your state can foreclose on your property in order to obtain payment and the lender could lose his collateral. Because of that the lender wants to make sure your insurance premium and property taxes are always paid. The lender collects your property taxes and your insurance premium in a special account. The money in the account will be used to pay your taxes and insurance premiums when they become due. The amount in this account is based on the estimated amount necessary to pay these obligations each year.
The Real Estate Settlement Procedures Act (RESPA) sets limits on the amounts that a lender may require a borrower to put into an escrow account for purposes of paying taxes, hazard insurance and other charges related to the property. Your lender or servicer will review the amount in the escrow account annually and notify you of a shortage or excess. Any excess of $50 or more must be returned to the borrower.
RESPA does not require lenders to impose an escrow account on borrowers; however, certain government loan programs (for example, FHA and VA loans) or lenders may require escrow accounts as a condition of the loan.
If you have a Conventional Loan and you do not have PMI (Private Mortgage Insurance), you have the option to close your escrow account and make your own tax and insurance payments. If you have a VA or FHA loan, the maintenance of an escrow account was a condition for the funding of your government-insured loan. In this case, the escrow account cannot be waived or altered.
Your escrow account payments may include a "cushion" or an extra amount to ensure that the lender has enough money to make the payments when due. RESPA does not require lenders to maintain a cushion and limits the amount of the cushion to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments.



Hope this helps.

So if I refinance or sell my home do I get that money back?

GD

So if I refinance or sell my home do I get that money back?