We plan on a VA no down payment loan, & so how much money do we need to have on hand to finish paperwork, lawyer, closing costs etc? Simple

Asked by andthentheresmaude, Philadelphia County, PA Wed Oct 26, 2011

purchase. Also is it a buyer's market to ask for closing costs to be paid by the seller?

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Larry Lichtman’s answer
Larry Lichtm…, Agent, Bala Cynwyd, PA
Wed Oct 26, 2011
Everyone has provided you with pretty good answers. In Philadelphia, total closing costs may cost somewhere between 6 to 8% of the purchase price. That should include all loan origination and underwriting costs and settlement costs.

Good luck with your purchase. If I can ever be of assistance to you in any real estate matters, please feel free to contact me anytime. Have a great week.

All the best,
Larry Lichtman
REALTOR, Property Manager
Your Real Estate Resource For Life
Cell/Text: (267) 254-7994
Web Reference:  http://www.DJCRE.com
2 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Wed Oct 26, 2011
You could expect an initial earnest money deposit of approximately $1k to 1% of the sales price.

Home inspection should be approximately $300-400.

There is normally an appraisal cost on a purchase at the time it's done, but for a VA mortgage the veteran usually pays that as part of the closing costs instead of paying for it during the loan process.

Like has been pointed out, the closing costs will vary depending on the sales price of the home. In PA there is a 1% transfer tax per each side (buyer/seller) which makes your closing costs a little bit higher than average across the U.S. Also because VA loans require you to set up an escrow account to pay your property taxes/homeowners insurance into, the amount of property taxes will also play a part in how much your total costs are at closing.

On a $390k home in Feasterville awhile back the closing costs came out to $7k (including the 1% transfer tax) + the pre-paid/escrow account was another $7k, totaling $14k. In the actual city of Philadelphia on a $178k sales price the closing costs also came out to $7k (appears there was a 1% transfer tax per PA + another .5% per the city) + pre-paids/escrow account was another $3.5k (considerably lower property taxes), totaling $10.5k.

I can't speak for the market in Philadelphia right now, but in most parts of the U.S. it is still very much a buyers market and sellers are willing negotiate in order to make a deal, including paying some or all of the buyer's closing costs if that is what it takes. From the 10 years I've been doing mortgages it isn't too uncommon for the seller to pay up to 3% of the sales price towards the buyers costs, above that percentage there is usually more resistance, but it is all up for negotiation. If your real estate agent is saying that sellers do not pay closing costs/discourages you from asking for them, but that is what you want to do, then I'd continue to search for a real estate agent.
0 votes
Splendor, Agent, Philadelphia, PA
Wed Oct 26, 2011
Just call me, It will be easier to go over the process on the phone. With a VA loan, the Seller can pay for all of your closing costs, and you do not need to use an attorney in Pennsylvania if you do not want to. I have a lender that can speak to you, this particular lender specializes in VA loans.
Kevin Reddington
Prudential Reddington Realtors
267 763 0607
0 votes
R. Eric Axel…, Agent, Sewell, NJ
Wed Oct 26, 2011
Hi Maude (or is it Walter?!),

For buyers, my company tends to use 3% (of sales price) in the suburbs and 4% in the city limits as a rough estimate for closing costs. It will all depend however on which mortgage company you choose. A word of advice, when interviewing mortgage companies, do not be concerned with the interest rate offered at this time, as that will fluctuate before you lock it in, but instead focus on their fees.

Yes, I am having much success getting max closing costs permitted by law built into my transactions.

Please feel free to contact me should you need anything further.
Web Reference:  http://kurfiss.com
0 votes
Carl Caldas, Agent, Philadelphia, PA
Wed Oct 26, 2011
In the state of PA. It is not necessary to have a lawyer review the contract. Closing costs typically run 5-6% the cost of the home. Just keep in mind when asking for a seller to cover closing costs you may end up paying closer to asking price then negotiating.

I am happy to run you closing costs and explain what they entail.


Carl Caldas
Web Reference:  http://THINKCITYSPACE.COM
0 votes
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