S2 Ep19 - Closing Costs - a podcast by Brian Cook And Kindra Cox

On Season 2 Episode 19 of The Brian and Kindra Show, they discussed closing costs. 

When buying or selling a home the term closing costs are often tossed about but sometimes there is confusion as to what that really means.  Closing costs are the funds needed to close your transaction, not including your down payment.   First, a quick look at down payments.  Your loan type determines your down payment:  FHA loans require 3.5% down payments, VA and USDA require 0% down. With these three loan types, the buyer can request the seller to pay up to 6% of the purchase price in closing costs.  Conventional loans can be anywhere from 3% down payment up to whatever you want. With conventional loans a buyer is typically limited to only requesting the seller to pay up to 3% of the purchase price in closing costs. 

The Oklahoma Real Estate Commission requires licensees to disclose closing costs to the buyer and seller.  This can be a challenge to the licensee as each lender has different fees. Fees commonly seen on the settlement statement are: underwriting fees, origination fees, appraisal fees, etc.  Kindra said her estimate of expense is generally a bit higher than at closing, though it is still pretty close.  Brian and Kindra also noted that they have found that lenders either charge a loan origination fee, which is 1-1.5% of the loan price, or they have more itemized fees. All these fees are repetitive and Brian and Kindra know how to spot the differences if they don’t look right at closing.  

One thing that gets tricky with closing costs are which ones are paid upfront and which are paid at closing. Earnest money has to be paid within three days of going under contract. In Woodward, home inspectors want payment at time of service and termite inspectors get their payment on the final settlement. Home inspectors do this because their report often makes or breaks the closing, so they need to be sure they are paid because sometimes they might not if they put it on the closing settlement. Another cost paid upfront is the first appraisal, usually around $550. There can also be a second appraisal or re-inspection and an appraisal management fee paid at closing. Some other fees at closing can be Insurance if you have a loan, escrow account fees, filing fees for the deed, pre paid interest and title opinion and insurance. 

Sometimes the closing cost fees can be daunting. The main point is to be prepared. Start saving money if you know you want to buy. As the market heats up with more options sellers will be less likely to pay closing costs. 

Brian and Kindra hope this information has been helpful to you. As always, if you have any questions or need help, please feel free to reach out to your local real estate professional.

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