Ok big ballers… what kind of closing costs will you be looking at on a 130k-140k house in WNY if you’re paying cash instead of doing a loan? I have no idea because cash was never even an option when looking at our house.
Down payment is a big chuck of a typical buyer’s closing costs, so that’s gone. Loan origination fees are part, they’re gone etc etc. Still have to pay a lawyer, title BS… I just have no idea what it will add up to.
I’ve got my good faith estimate on my desk at home. I’ll toss up the itemized costs for a $200k house later. Should be about the same as a $140k house.
:tup:
idunno, loan points only and origination fees aren’t really that much of the cost. Most of it is taxes, lawyer, title, inspection
This is what I was thinking as well. It’s been 12 years or so since I bought my house…and it’s nowhere near $140k but the bulk of closing was taxes, paperwork and inspection.
I managed to find the paperwork on my server for the refi we did and taking out all the loan and mortgage company BS I came up with $3600.
in the couple of cash purchases i’ve made i think all we ended up paying for was transfer taxes/fee, prorated property taxes, title search and title insurance… of course these were all about $35K purchases so it didn’t amount to very much
I don’t see how paying in cash makes a difference here. I bought my house which was right in the range you posted Jay and I paid everything out of pocket, first year taxes, lawyer fee’s, etc etc so that my mortgage was exactly that, the price of the house. It came to about $8000 I want to say if my memory is correct.
The only MAJOR difference at all will be not having to escrow your taxes and homeowners. Your closing costs for that house will be $4000ish.
Breakdown of what you can expect to pay at closing:
Origination Fee: $500 —(Not sure if that dissapears with a full cash payment)
Appraisal: $350-400 (This should be gone, as you aren’t holding a loan)
Underwriting: $300
NYS Mortgage Tax: 1.75% of sale price (100k house would be $1,750)
Bank Attorney: $300-400
Title Insurance: ~$600 for a 100k house
Recording/Processing Fees: $300-400
Personal Attorney: $400
^ I’m guessing 2 of those don’t apply. Origination fee and underwriting.
I’m also not sure about the NYS Mortage Tax.
http://www.tax.ny.gov/pit/mortgage/mtgidx.htm
New York State imposes a tax on the privilege of recording a mortgage on real property located within the state. In addition, New York City, Yonkers, and various counties impose local taxes on mortgages that are recorded in those jurisdictions.
There is no mortgage when you’re paying cash right so what would they be recording?
Meeting with a realtor tomorrow so I’m sure I’ll get some answers then.
Just curious as to why you would want to pay off a house in cash right now with rates so low. Seems like if you played your cards right, having the cash at your disposal would be more beneficial than avoiding closing costs/interest rates.
Bah forgot about this/didn’t have time last night. It’s still on my to-do list.
^^^^ that’s a good point, however with all the additional closing costs etc., you are paying more than just interest, especially if you are only there for the average 5-10 years. Take the $8000 number Krant used, to make it easy say he stays in a house for 8 years, that means just to close he paid an extra $1000 a year, or a little under a percent. Now the 4.5% mortgage rate is really 5.5%.
That’s why the PMI is so gay IMHO. You pay an extra $70 or so a month on a $140k house, that’s like having another 1.5% added to your mortgage rate. Now the rate doesn’t seem as exciting. Also I’m pretty sure that is not calculated in the truth in lending forms they send you.
X…
True, but I guess there are a lot of variables involved. The biggest being what you can do with the cash if you had it. It takes money to make money but if it’s just going to sit in low interest savings account, you might as well avoid the inevitable interest rate on the mortgage.
I would put 20-50% down and keep the rest in somewhat safe investments. If the economy picks up at all there’s a lot more money to be made and flexibility in life by having the cash on hand. Plus you’ll never borrow money this cheap again.
If you have the cash I would at least put 20% down, that would eliminate PMI and having an escrow account. Just make sure you don’t blow the remaining 80% on useless shit…lol
PMI definitely sucks, it should be based on credit score to weed out the scummers who will default. I put down 15% on my second home and still had to pay until I could build that additional 5% equity, the bank was making +$100 a month for this “fee”.
:poke: The DOW’s over 12k and Warren Buffet’s selling…
We’re already back in a bubble.
Please don’t turn this into a fiance/don’t finance debate. She already has plenty of money diversely invested, plus a cushy NYS teacher retirement. The house is being paid 100% in cash. When her current house sells I’m sure that money will be invested, but in the mean time she’s going to use the ability to do a quick cash sale to negotiate price.
that is a good point – you can often negotiate with the fact that you’re paying cash.
Aren’t there some screaming deals to be had if you pay cash? Some bank forclosures or something?