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Closing Costs

Typical Buyer's Closing Costs and Sample Monthly Payments

It is customary for buyers to pay certain standard closing costs, including charges for their credit report, recording fee, lender title insurance, tax service fee, lender fees, prepaid interest, insurance and escrow amounts for taxes and insurance . Often buyers must also pay an origination fee, and sometimes discount points. These costs can vary depending on loan type and closing costs negotiated on the contract. Below is an example of closing costs and monthly payment, based on a conventional, 30 year loan, at 4.5% interest, for a $200,000 purchase price with a 20% down payment. With 20% down payment Private Mortgage Insurance (PMI) will not apply for a conventional loan.

Sales Price: $200,000
Less Down Payment: $40,000
Mortgage Loan Amount: $160,000

Sample Monthly Payment at 4.5% Interest for 30 Years
Principal and Interest: $811
Taxes: $220
Insurance: $50
PMI: $0
Total, with PMI: $1081

 

Closing Costs (*=negotiable)
Discount Points * $0
Lender Fees * $999
Credit Report $56
Lender Title Insurance $125
Buyer Recording Fee $25
Tax Service Fee $95

 

Escrow Accounts:
3 Months Taxes @ $220 $660
2 Months Insurance $100
One Year Homeowner's Insurance $600
Prepaid Interest (based on 15 days) $405
Total Closing Costs: $3065

 

Standard Closing Costs

These costs can be vary depending on loan type and closing costs negotiated on the contract.

Example: 4.5% interest rate for 30 years 

Mortgage Type: Conventional

   Sale Price:     $200,000  
Less Down Payment(20%)      40,000
Mortgage Loan Amount     $160,000
Closing Costs (*=negotiable)
Loan Type  Conv. FHA/VA
(1) Loan Origination (Lender Fees) $999 $999
(2) Discount Points Optional  0 0
(3) Lender Title Insurance  125 125
(4) Credit Fee 25 25
(5) Tax Service Fee 95 0
(6) Buyer Recording Fee 25 25
(7) Escrow Accounts    
3 months Taxes @ $220 660 660
2 Months Insurance @ $50 100 100
(8) One Year Home Owners Insurance  600 600
(9) Prepaid Interst 15 Days    
Total Closing Cost:  $2629 $2534

Conventional Loans: conventional loans allow the buyer to pay any fee. The Seller is allowed to pay a percentage of the buyer's Closing Cost based on the down payment. 10% down: 6% closing cost, 20% down: 6% Closing Cost, 25% down: 9%Closing Cost.

FHA Loans: FHA allows the buyer to pay any fee except for the Tax Service Fee. The Seller must pay the Tax Service Fee. The Seller is allowed to pay up to 6% of the Buyer's Closing Cost.

VA Loans: VA does NOT allow the Buyer to pay Underwriting Fees, Tax Service Fees, Escrow Fees, Lender Fees, Closing Fees and Commissions of any kind. The Seller is allowed to pay up to 4% of the Buyer's Closing Cost.

The above closing costs are estimates; these can vary depending on the motivation of the seller and the interest rate a buyer selects.

Our goal as your Buyer's Agent is to negotiate these costs to best suit your needs.

But Will These Closing Costs Apply to MY Home Purchase?

The Ingles/Company Realtors can help you figure out what to expect when it comes to closing costs. Give us a call at 505-828.1366 or contact us to get started.

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