How much would closing costs be on a 100k condo?

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How much do you think closing costs should be on a 1 bed 1 bath condo with 626 sq footage in a nice area. There would be two loans on the condo. 80/20 loan. No PMI. $ 600 payment per month on the first loan, 6.5% interest.. $ 180 per month on the second loan. 9% interest. NO MONEY DOWN. Interest only payments. All I want to know is how much do you think closing costs would be? I was quoted around $ 7,000 for closing costs. If I am putting no money down and paying no PMI….its a good deal. Banks or credit unions have to make money as well as mortgage brokers.
My buddy had almost same exact condo with same scenario EXCEPT….he purchased with no money down AND paid no closing costs. But he is screwed because he got into a 3/1 ARM teaser rate. His condo payment is $ 800. It is going to double next year. Mine rate is fixed for ten years. hence I would rather pay $ 7,000 in closing costs up front rather than being slammed with double payments after ARM adjusts. What do u guys think?

  1. Reply
    May 16, 2011 at 4:35 am

    You shouldn’t have to pay any closing costs. The seller always pays the closing costs. Right now is a good time to buy. You should shop around to different lenders to try to find a better mortgage. It’s a buyers market so name your price and don’t rush into buying something unless it’s a really good deal. They’re out there.

  2. Reply
    Debra E
    May 16, 2011 at 4:56 am

    if you are buying via realtor you could have written in your offer seller to pay 4% of your closing costs. that will help. its a buyers market in most states. if you have a good realtor that is successful he/she should know which closing company the best and ask them to give you good rates if he gives them a lot of business they will. always always get a fixed interest you never know whats going to happen work wise but you always know what your mortgage will be.

  3. Reply
    nick k
    May 16, 2011 at 5:19 am

    $ 7k is too much in closing costs. You have a decent deal from your lender but that seems out of line. Some of it depends on where you live as well. Some states have higher closing costs then others. Have you shopped the deal at all?

  4. Reply
    May 16, 2011 at 6:16 am

    You should aim for 1% fees, 1% for title insurance, and depending on taxes it should be1-2% for escrows/prepaids so 3.5% percent of the loan amount should be closing costs. If the seller does not offer to pay the costs offer him 104,000 and 4000 comes back to you for closing costs- this will give the seller his 100k and allow you not have to come out of pocket to pay for closing!
    good luck

  5. Reply
    May 16, 2011 at 6:34 am

    I agree that $ 7000 is outrageous for a $ 100K loan. You should expect about half of that as a high estimate. The first answerer is incorrect-the seller does not pay the closing costs of your loan. However, when making an offer, it has become common to ask that the seller contribute toward your closing costs. My recommendation would be to ask the seller in the contract to pay $ 4000 toward closing, and then negotiate from there. Also, if your lender is serious about closing costs being 7%, find another lender .

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