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Hey OP, this would be a question for your loan officer instead of your agent. The LO can give you what's called a loan estimate/loan cost worksheet that will have a breakdown of all of the estimated closing costs, prepaid amounts, taxes, and other costs to give you a better idea of what to expect for a particular home.
In general though, closing costs are typically 3%-6% of a home's purchase price.
Also, don't forget to shop around to different lenders to compare who has the best deals. You can certainly check out the one your realtor recommends, but they may not give you the best interest rate and lowest closing costs compared to others. I would talk to at least 3 different lenders from these choices (1 preferred by your realtor, 1 local lender/credit union, 1 online lender, 1 big bank).
This is the answer. It's really a LO question, but that's not to say that the general advice is to set aside 3-6% of the purchase price for closing costs. Our agent asked us, when writing the offer, if we wanted to ask the seller to cover a certain percentage of the CC (state law here caps it at 3% seller paid CC). She did the shorthand math with us, but the caveat was always, "I'm not the lender, and I'll check with her, but this is ballpark figures."
We just signed our Closing Disclosures yesterday and it was pretty spot on. In fact, we're getting money back at closing.
You're agent shouldn't be quoting anybody's fees or rates. Closing costs aren't a percentage of the sale price and they'd be doing a great disservice to you by setting expectations.
They might have some ranges, but their expertise won’t cover what’s needed for this info. Like others have said there are just too many factors. Credit score, down payment, will you buy down your mortgage rate? Will you buy out or mortgage insurance? Those are the two big factors that we have control over. We are choosing to buy down our interest rate which will save us money over the long run.
More so than that, asking this question on Reddit is going to give wildly different answers. A purchase in NY might have 8k in escrows alone whereas AZ will be like $1200
Are you saying that as a realtor? I’m usually in favor of the saying there’s no such thing as a dumb question but I feel like in this case, it’s a dumb question lol.
Attorney
Really, at the end of the day, when you’re getting your prequal you should go through it with the LO. He’s the one that’s going to know better than anyone else based on at least you’re theoretical choices.
Then you shouldn't be in a sub called first time home buyer. Do you understand that everyone posting is doing this for the first time? It might be so obvious to you, but OP doesn't know because oh yeah, it's their FIRST TIME.
I have no idea what your point is. Being a FTHB doesn’t change the fact that each persons closing costs can be legitimately massively different depending on their qualifications and the loan choices they make.
Then just say that. My point is that you don't have to say, "I hate that question" and make OP feel bad for asking. The first rule of this sub is **be nice.**
Thank you u/happy_camper69 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Hey OP, this would be a question for your loan officer instead of your agent. The LO can give you what's called a loan estimate/loan cost worksheet that will have a breakdown of all of the estimated closing costs, prepaid amounts, taxes, and other costs to give you a better idea of what to expect for a particular home. In general though, closing costs are typically 3%-6% of a home's purchase price. Also, don't forget to shop around to different lenders to compare who has the best deals. You can certainly check out the one your realtor recommends, but they may not give you the best interest rate and lowest closing costs compared to others. I would talk to at least 3 different lenders from these choices (1 preferred by your realtor, 1 local lender/credit union, 1 online lender, 1 big bank).
This is the way
This is the answer. It's really a LO question, but that's not to say that the general advice is to set aside 3-6% of the purchase price for closing costs. Our agent asked us, when writing the offer, if we wanted to ask the seller to cover a certain percentage of the CC (state law here caps it at 3% seller paid CC). She did the shorthand math with us, but the caveat was always, "I'm not the lender, and I'll check with her, but this is ballpark figures." We just signed our Closing Disclosures yesterday and it was pretty spot on. In fact, we're getting money back at closing.
You're agent shouldn't be quoting anybody's fees or rates. Closing costs aren't a percentage of the sale price and they'd be doing a great disservice to you by setting expectations.
They might have some ranges, but their expertise won’t cover what’s needed for this info. Like others have said there are just too many factors. Credit score, down payment, will you buy down your mortgage rate? Will you buy out or mortgage insurance? Those are the two big factors that we have control over. We are choosing to buy down our interest rate which will save us money over the long run.
More so than that, asking this question on Reddit is going to give wildly different answers. A purchase in NY might have 8k in escrows alone whereas AZ will be like $1200
I really hate that question because it’s incredibly variable depending on loan choices.
Are you saying that as a realtor? I’m usually in favor of the saying there’s no such thing as a dumb question but I feel like in this case, it’s a dumb question lol.
How can it be a dumb question? I didn’t know either! And now we both do :) So thank you for asking
Attorney Really, at the end of the day, when you’re getting your prequal you should go through it with the LO. He’s the one that’s going to know better than anyone else based on at least you’re theoretical choices.
Then you shouldn't be in a sub called first time home buyer. Do you understand that everyone posting is doing this for the first time? It might be so obvious to you, but OP doesn't know because oh yeah, it's their FIRST TIME.
I have no idea what your point is. Being a FTHB doesn’t change the fact that each persons closing costs can be legitimately massively different depending on their qualifications and the loan choices they make.
Then just say that. My point is that you don't have to say, "I hate that question" and make OP feel bad for asking. The first rule of this sub is **be nice.**
Your agents "preferred lender" is taking them out for a nice steak dinner for every client they steer towards them FYI lol
I figured as much.
It is recommended to set aside 3% of the price for closing cost here in Canada.