Home Buying in Phoenix>Question Details

Laura,  in Phoenix, AZ

How do you figure out the closing costs?

Asked by Laura, Phoenix, AZ Sun Jun 21, 2009

I have heard that the closing costs are much lower when you buy with cash. I'd like to figure it out both ways (loan verses cash) & see the difference. What is the formula to figure out closing costs both ways?

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Ask your Realtor or your closing agent to send you a copy of the expected closing costs!
0 votes Thank Flag Link Mon May 9, 2011
Here is a list of the typical closing costs for cash vs mortgage. This is in FL.

Expense of Buyer

Attorney Fees (if required)
Recording Deed
Termite Inspection
Home Inspection
Defective Drywall Inspection
Mold Inspection
Flood Insurance
Well Test/Sulfur/Sodium
Proration of Real Property Taxes
Proration of Maintenance Fees
Homeowner Insurance

Additional Expenses if Mortgage Obtained

Mortgage Title Insurance Policy
Service Fee or Origination Fee (if applicable)
Doc Stamps on Note (.35 on each $100)
Lender's Attorney Fees
Appraisal Fee
Assumption Fee on existing mortgage
Intangible Tax (.002 on New Mortgage)
Recording Mortgage
Credit Report
Escrow Account (Taxes and Mortgage)
0 votes Thank Flag Link Mon May 9, 2011
I am with Wells Fargo and our Lender fees are much less than other. Our lender fee is only $895.00 and I dont charge origination fees or discount points to get the rate.
0 votes Thank Flag Link Sun May 8, 2011
Ballpark answer ... around 3 % if you're financing, around 1 % if you're paying cash.
0 votes Thank Flag Link Mon Jun 29, 2009
Your realtor should be able to run off a Cost sheet for you. It should be very close to the exact numbers. I myself do them when we make an offer on a property so the buyer has a good idea of total costs and the amount of cash they will need.
0 votes Thank Flag Link Sun Jun 28, 2009

Ask your REALTOR, he/she will speak to your lender and the title company to give you the best information about your closing cost and pre-paids. A rule of thumb is what was said in 2 earlier comments 3-4%. with loan and 1% cash. Still speak with your REALTOR.
0 votes Thank Flag Link Sun Jun 21, 2009
Most if not all states have RESPA laws that require estimates of transaction costs. Remove all those having to do with a loan- appraisals, processing, "handling" wiring money, etc. Cash should still have recording deed, revenue stamps or transfer fees, attorney or escrow, inspections-home, pests, radon some of which you can pass on if you are confident there are no hidden issues in the structure but not a good idea. You will still want a title insurance policy and in some states the title co offers escrow services to close. On average, closing costs with a loan are $5000 to $10,000 on a typical single family house with a loan. Half that for cash. HO Insurance is now prepaid for a year per the lender so a cash deal you can maybe pay just a few months ahead. I believe AZ uses title cos to close deals, similar to CA. But to a seller, all money is cash at the closing so there is no advantage to paying cash in that regard. Contact one of these realtors below. Good luck.
0 votes Thank Flag Link Sun Jun 21, 2009

As mentioned below they will vary somewhat based on the loan type you are looking at and who you use. A general rule of thumb that I use is 3-4% with a loan and 1% if paying cash. Your Realtor (you have a good one, right?) can work with your lender and the title company to get a much more accurate number for both scenarios and then you can choose.

With Your Success in Mind,

Shar Rundio
Keller Williams Integrity First Realty
480.560.7255 (direct & text)
Twitter: @SharRundio
0 votes Thank Flag Link Sun Jun 21, 2009
The main savings when paying cash are not paying the loan origination fee or discount points, which are part of your closing costs, and impounds withheld at closing by the lender. You also avoid smaller loan fees such as processing, underwriter, and other miscellaneous costs of handling the loan. All these will vary lender to lender and depend on your interest rate. Best to get a good faith estimate (GFE) from the lender which should list these costs. With cash purchase in addition to the purchase price, you also just pay your half of the title closing fee, recording fee, and prorated costs such as taxes, HOA, etc, and possibly title insurance depending on your agreement with the seller.
0 votes Thank Flag Link Sun Jun 21, 2009

There are different conditions and loan types both conventional and government funded that may affect closing costs, but a general rule will be 3-4% of the Sales Price.

Hope this helps you.

Stew Keene
Signature Realty Group
Web Reference: http://www.stewkeene.com
0 votes Thank Flag Link Sun Jun 21, 2009
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