One-Time Costs of Purchasing
One-time (non-recurring) costs:
It is often possible to reduce these closing costs by working with the right real estate and mortgage broker. Call us for more info.
Financing lender points and fees
This depends greatly on the lender and the financing
program you choose. To do a valid comparison, compare using the same program
with no point and no fees. This will let you do an apple-to-apple comparison.
Also, the comparison should be done on the same day, as interest rate
fluctuates even multiple times daily. Don’t be quick to decide by an inducement
saying they will also pay for the escrow fees. Most lenders can do that, with a
slightly higher interest rate. Remember to do an apple-to-apple comparison.
Escrow fees and charges
The charges from different companies vary but not by
a great deal. Don’t shop for the best rate. The headaches caused by an
inefficient escrow officer is not worth it. The cost is dependent on the
purchase price of the home and the loan amount. On a $500K home with a typical
financing, figure on approx 1% of purchase price. That should cover everything.
Make sure you ask for a “first-time buyer” discount.
Pre-paid interest and property tax adjustments
The lender charges up to one month pre-paid
interest. The property tax is paid in 2 installments. The calculation varies
depending on the close of escrow date.
Inspection Fees
It is prudent for a buyer to do the inspections,
even when buying a property in “as is” condition. The fee depends on the type,
size and age of the property. On a typical $500K single family home, you can
figure on approx $550 in inspection fees.
Hazard/Fire Insurance
This first year premium is paid in escrow. At the
time of this writing, for a $500K single family home, about $1000 per year
would be reasonable. Shop around as rates vary greatly.
Flood Insurance
If a property is determined to be in a special flood zone, a flood insurance would
be required by the lender. Shop around as rates vary greatly.