Home Buying in Davis>Question Details

Karina1, Other/Just Looking in Davis, CA

what is the typical amount of money paid in up front closing costs for a home purchased this year?

Asked by Karina1, Davis, CA Thu May 14, 2009

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Karina - the reason why there's such a range in closing costs is 3 fold:

1. some of the fees are fixed, some are a percentage of the home price/loan amount. As an example, if your purchase price is around $150k, then your fees should be in the 3.5 - 4% range...if your price is $300k, then you're looking at roughly 3%

2. Paying points to lower your rate is an optional cost. A point is equal to 1% of your loan amount....if you're planning on staying in the home for an extended period of time, then paying points could be justified. Depending on the size of your loan, paying 2 points could nearly double your closing costs!

3. Lastly, costs/fees will vary depending on the specific entities involved in your transaction: your mortgage company/lender/appraiser/title company......these are the major sources of fees.....then there's miscellaneous fees like HOA dues/ Mello Roos fees that may or may not be present in your transaction...

Though this may get a little confusing, I'd be happy to review your situation so I can give you specific feedback!

best regards,

Jeff Marr
Stanford Mortgage
916-947-1312
0 votes Thank Flag Link Sun Apr 4, 2010
A buyer's closing costs can range from 2-5%. These costs include your lender fees, escrow fees, notary, document fees, courier charges, prepaid taxes, HOA dues and mortgage interest. On a smaller purchase price (i.e. $100,000) these fees can be closer to 5%, on a larger purchase price ($1,000,000) these costs can be closer to 2% (there is some economy of scale).

I don't know what the average amount buyers are paying - depending on your market, if there are multiple offers, then seller's don't have to pay these fees to be competive. In slower markets, or for a property that has been harder to sell, sellers will often agree to pay up to 3%. Lending guidelines vary, but most lenders will allow a seller to pay 3 - 6% toward the buyers closing costs, depending on the buyers type of loan.

-Grace
Grace Olson-Bonilla, http://www.SoCalGrace.com
Web Reference: http://www.SoCalGrace.com
0 votes Thank Flag Link Thu May 14, 2009
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