I want to ask the seller for closing costs - So how much are closing costs in Iowa City anyway Denise?
This is another one of those questions that comes up a lot lately. Mostly of course with first time home buyers, for obvious reasons since it's the first time they buy a house. This of course is really a question for a lender. As it happens I do see A LOT of HUD1 Settlement Statements so feel qualified enough to give you at least some guidance on the topic.
Here's a list of the items that you will see for sure on your closing statement. These are estimates and will depend on the provider. (Bank, attorney, appraiser, etc). One of the questions I get asked is whether a more expensive house means more closing costs. It may when it comes to points, or a loan origination fee, but not for the standard closing costs. Regardless of the price of the house the costs will be the same for the items below with the exception of the recording costs. That calculation is based on the price of the home and is $1.60 per thousand dollars, with the first $500 being exempt.
Appraisal Fee: $275 - $475
Credit Report - $30
Flood Certification Fee $11
Abstract or Title Search - $150
Title Examination - $175
Title Guaranty - $110
Recording Fees - $130 (Based on price of home)
Processing Fee - $150 - $500
Other closing costs, as I mentioned before, might include a loan origination fee, or points if you decide you want to pay for a lower interest rate. Different loan programs will have different fees associated with them. The items I'm covering here are the ones associated with all loans that come up on every HUD1 Settlement Statement. Specific closing costs based on a particular type of loan is not covered here and something you will need to talk to a lender about. Also, some lenders have fees that other lenders don't charge. They're not covered here either. That's why it's a good idea to check out a couple of lenders and compare their fees.
Home insurance is expected to be paid for one year in advance. It's not part of the closing costs. Reserves deposited with the lender in an escrow account will be 3 months insurance and 3 months real estate taxes. These aren't closing costs either, they're known as "prepaids." That is something that you are prepaying in anticipation of future mortgage payments to the bank and will be held in escrow to cover that.
Very often first time home buyers will want to ask the seller to pay closing costs. (Actually, what's happening is that the closing costs are included in the purchase price). A typical amount to ask for in closing costs is $2000. This amount should comfortably cover standard closing costs and prepaids. Although prepaids can be part of the purchase agreement, usually it is not possible to include other closing costs associated with a specific loan type in a contract to purchase a home. Once again though, I'm not a lender. This post offers general information and may not cover your specific case. If you have other costs associated with your loan you'd like included in the purchase agreement you should talk to your lender BEFORE writing an offer.
Originally posted @ ichomesforsale.com
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