Post # 1
I think we are almost there in terms of home buying, yay!
We met with our mortgage lender again and he gave us an estimated amount of what would be due at closing based on our max price (this is our limit not the banks), this included down payment and closing costs (in closing cost estimate there were additional fees). However I’m worried that he quoted us too low. We are not draining our savings or anything but I had a very specific amount in my head of how much money I wanted to make sure we had after we purchase, so I’m curious were there any unexpected costs during the actual loan process? I’m not talking about needing to buy a new roof or water heater after closing. I’m irrationally concerned that closing costs will end up being like 10k more than we are being quoted!
Post # 3
@cora_123: Home inspection, your lender may have appraisal/lender fees but the estimate we got from our bank was pretty spot on. You may also want to check tax, HOA and home owners insurance costs too. Congrats on the upcoming home purchase 🙂
Post # 4
They always err on the side of caution with closing costs, so they will likely be less than you were quoted, or at least very close. When you select a home you want, you’ll likely want to do a home inspection- I don’t know whether you’re expecting that or not.
As far as unexpected costs, for us (we closed at the end of July), it had nothing to do with the loan or the cost of the house- it was all the extras once we moved in! Stuff like a lawn mower, rake, window coverings (these are in the thousands!!), fence (again, thousands!!), etc….
Post # 5
Appraisal fee, inspection fee, termite inspection fee, radon remediation (if needed – this can be put on the seller though if they agree to it)
We didn’t really run into any surprise costs, and our closing costs were not as high as I’d thought they’d be.
Our only surprise costs came after we owned the place and half the appliances broke =P
Post # 6
I found that the estimated costs were higher than we actually paid. I think you end up paying somewhere around 10% or the purchase price.
Post # 7
my lender told me the exact amount i would need to bring to closing. i had a check made in that amount.
Post # 8
@cora_123: You should be fine. Your lender should have gone over everything with you carefully and the estimate for closing costs should be close or even over-estimated. A good lender will take into account and tell you things like the cost of the appraisal, inspection, attorney fees, origination fee (if there is one), etc.
My husband and I are currently going through the same process so I feel your pain. I probably bug my mortgage lady at least twice a day, lol. Ask your lending officer all the questions you want to, that’s what they get paid for. Good luck with your new home!:)
Post # 9
do you have a property in mind that you har put an offer in for?
if he gave absolute closing costs and down payment for the HIGHEST end of your budget, you will probably end up paying that cost at maximum. it won’t go up by more than a few dollars unless you end up buying a higher priced home.
Post # 10
The lender miscalculated with us, and we had to pay about $1k more than they quoted. We did end up getting a refund check in the mail about 2 weeks later for that amount, but we wouldn’t have been able to close without it. Make sure you have reserves that are liquid. Stuff comes up, and you’ll have to put earnest money down (just in case you’re still in the process of making money accessible – have that ready to go at a moment’s notice.
There’s always the possibility that you’ll go under contract, pay for an inspection and appraisal, and then walk away and need to do it all over again. That’s a big drain, at $800-1000 a round (for both combined).
Post # 11
I was very young when I bought my first home. It never occurred to me that I would have to pay my share of the year’s city property taxes. I thought I wouldn’t have to pay taxes until they were due again the next year.
It wasn’t a complete surprise as my banker told me about them before I was at the stage of signing anything, but it was an expense I hadn’t planned for.
Post # 12
@cora_123: Your lender should have included this in your closing costs, but we had to pay one year upfront of homeowner’s insurance, HOA, and flood insurance. Just double check that those were included in it and ask if not. Note- even though you pay a year upfront, your monthly mortgage amount will still include those things so you won’t have a lower payment for the first year or anything like that.
Post # 13
Our closing ended up being higher for some reason but the money went into the escrow account and we will be getting in back in a month or two (6 months after closing).We had to pay a year of insurance up front and the inspection fees.
Post # 14
Nothing was completely unexpected, but I would say the costs that I hadn’t neccessarily added up came after we were in the house. There wasn’t much to closing costs – lawyer’s fee, appraisal, taxes, HOA. We knew those going in. We did have extra fees we had to pay the lawyer after the fact that I wasn’t aware of. Photocopying fees and stupid little things like that but it was a small amount.
The fees I didn’t add up were things like cleaning supplies, new shower heads, a lawnmower, felt pads for the bottom of chairs, etc. I think I spent $100 just at a dollar store. We’ve spent way more at other places.
Post # 15
- Wedding: October 2011 - Bed & Breakfast
Points. If you want to buy down your interest rate, you will need additional cash upfront to pay points on your loan. It makes sense to pay points if you will keep the loan long enough to benefit from the reduced interest rate. We paid $7k in points on our loan that will save us $30k over the lifetime of the loan (so a $23k net savings). Since this is our forever home, it made the most financial sense for us to pay a little extra upfront.
Post # 16
@lovekiss: I wish that were a thing here! Maybe it doesn’t make sense with our terms though.