CLOSING COSTS IN FLORIDA

[Anonymous]

I'm hoping that someone can provide me some answers - - I'm confident that you guys can because this forum is full of the best, most realistic, real, raw advice that I've read (heard) anywhere and I really do respect what everyone has to say.  The information here is priceless!!

Okay, so, my hubby and I are praying to close on our new construction home here in Orlando sometime between Aug and October of this year.  My LO sent docs (GFE) with estimated closing costs of about 12K (luckily, the builder is paying 6K of whatever the closing costs are).  Originally, the GFE had closing costs at about $9500 but that GFE was revised because our purchase price changed (due to design center options and additions ) and the addition of pest inspection and increase in Hazard Insurance.  Anyway, with all that being said, does $12k in closing costs sound about right (the norm)?  The purchase price of the home is $275,680.  (we are at 10%DP now but are hoping to get switched to another program where we only have to put 3-5% DP).  Any input on this would be greatly appreciated (as always!)  Thanks in advance.

[Anonymous]

What are you including in the $12,000 figure?  There are really three things that you have to pay in buying a house - Down payment, Prepaids (taxes, insurance, interest, etc), and closing costs. 

Are you including the prepaid items with closing costs?  12,000 would be high for a 275,000 loan if it's just closing costs.  I would expect something closer to 8 or 9 thousand.  Including prepaids though, and the amount seems to be reasonable.

Our house, for example, is about $216,000.  Closing costs are around $7,000.  Prepaids add another 3 or 4 thousand, plus the down payment.  Total cash out of pocket (not including seller concessions or discounts) would be around $19,000. 

[Adalen]

Closing costs on my $256K home purchase came out to roughly $8000, total cash with the downpayment was $16000.

[Anonymous]

That 12K figure is only including the prepaids and closing costs ... not the down payment.  (Keep in mind that the builder is also paying 6K of this settlement amount).  However, on the GFE the "A" line (adjusted origination cost) is $878 (was 3K but we got a $2200 credit) and the "B" line (charges for all other settlement services) is $11,645 (includes appraisal, flood cert, tax svc., pest svcs., initial deposit for escrow $3050 (I believe this changed from orig $867), hazard insurance $1500).  Interest rate is 3.9%.  Remember, we are currently set at a 10% DP but hope to put down 3-5% once we switch to another program.  So, what do you think?

[Anonymous]

The amount looks fairly reasonable.  Closing costs are generally 3-4 % of your loan, and the prepaids are going to be based on the actual price of homeowners insurance, the actual purchase price of your house, and the actual date of closing. 

[Anonymous]

Thanks guys.  I guess that it just looked a little high to me because the original GFE before our purchase price changed was showing costs around 9K and now it has gone up to 12K.  Thank God that the builder is paying 6K of those!!  And, if we get that 3.5%, we'll be looking at total cash out of pocket (including DP) of around 16K-$17K.  Closing isn't until late in the year (8/13 - 10/13 ...hoping more for October to allow for more time to save $$). 

[Anonymous]

The lender can pay up to 6% of the loan amount in closing costs for you, so if you had to, you could probably get them to bump the price of the house in exchange for the closing cost assistance (seller concessions).  They could certainly kick in more than $6,000.  That is something you can work out with your loan officer as well.  Also, because interest rates are so low, it's not a bad idea to consider lender credits if you're short on available cash.  Basically, you agree to accept a higher interest rate than you'd qualify for in exchange for closing cost credits.

[Anonymous]

Thanks so much for that information, foofighter!!  I will definitely mention the possibility of having the builder put in more than 6K.  That would be a tremendous help.  Also, we did a lender credit of $2200 (for closing cost credit).  So, instead of that origination fee being $3K, it's only $878.  That may be it for the lender credit because that has us at a rate of 3.9% right now.  I don't want to go any higher than that.  But, hopefully in late July early August, our credit score will have risen enough to get us priced with an even better rate.  Right now, our mid scores are 668 (hubby) and 669 (mine) both EQ - lender pulled on 3/17.  I'm sure she's going to pull it again around that August mark because our 30-day mtg late will be a year old in July.  Just keeping finger, toes, AND eyes crossed that all goes well for us.  I would hate for there to be any bumps in the road for us ... we've been working on and repairing our credit really hard and saving money has been the hardest but I'm praying for an awesome reward of a newly constructed home in the end!!