First time homebuyer here trying to pulse check closing costs (link here) with the experts here. The transaction is thru a broker/wholesaler — something I also have no experience with.
There are a few things here I’m hoping to gather opinions on. I’ll start with my observations and of course would love any input on these numbers and all other knowledge that anyone is willing to impart. The numbers that stand out to me are:
The enormous broker fee of $8,200, which seems like it’s 75% offset by the $6,322 lender credit. I wasn’t aware they took such a high fee before I locked the rate (3%), but do feel good about the rate since most lenders wanted 3.125%. That said, I still am not sure if going wholesale is really any better than a traditional lender or bank but would love opinions here.
The $695 “compliance fee”, which feels like a garbage fee. Yes/no?
The $1,232 property tax, which I believe is grossly underestimated since there’s no way a home in CA can sell in 2021 and not have a property tax bill of at least 1.2%, right? I believe that number should be closer to something like $2,300 for the first 2 months.
The $2,290 Escrow “Settlement agent fee” feels accurate, but I assumed that that would be split in half (isn’t it usually split 50/50 between buyer and seller?)
Title fees overall feel pricey, but my mortgage broker told me the seller selects the title and escrow companies. I’d read that buyers are allowed to shop these (ie section C of the loan estimate), but I guess that’s not the case. I’d love to know why, if anyone has any insight here.
The biggest takeaway is that my total closing costs appear to be about $12,250, although with the updated property tax, appraisal and inspection fees (paid separately), I think the actuals will be closer to $14,400. That doesn’t seem all too bad for $1M+ home, but I have nothing to compare it against. This doesn’t include the appraisal or inspection, which I’m paying for separately (about $500 each).
Open to any and all feedback. I do wish I’d had time to ask these questions sooner but it’s been a mad scramble given how competitive the market is and how quickly the seller wants to close. For all I know, I could be getting ripped off. Regardless, I’m hoping to make this a learning opportunity and wanted to post here for input. Thanks in advance for sharing your knowledge and feedback.