Below is a list of the items that you will see for sure on your closing statement when you buy a home in Iowa City. These are estimates and will depend on the provider of the services listed. (Bank, attorney, appraiser, etc). Typically you’re looking at around $1500 with a local bank for the standard closing costs. One of the questions I get asked is whether a more expensive house means more closing costs. It may when it comes to points, or a loan origination fee, but not for the standard closing costs. The list below is for standard closing costs that come up on all loans when you buy a house in Iowa City and remain the same regardless of the price of the house.
Appraisal Fee: $275 – $475
Credit Report – $30
Flood Certification Fee $11
Abstract or Title Search – $150
Title Examination – $175
Title Guaranty – $110
Recording Fees - $110 (Government fees for recording the deed, mortgage and releases into public record).
Processing Fee – $150 – $500
Other closing costs, as I mentioned before, might include a loan origination fee, or points if you decide you want to pay for a lower interest rate. Different loan programs will have different fees associated with them. The items I’m covering here are the ones associated with all loans that come up on every HUD1 Settlement Statement. Specific closing costs based on a particular type of loan is not covered here and something you will need to talk to a lender about. Also, some lenders have fees that other lenders don’t charge. They’re not covered here either. That’s why it’s a good idea to check out a couple of lenders and compare their fees.
Home insurance is expected to be paid for one year in advance. It’s not part of the closing costs. Reserves deposited with the lender in an escrow account will be 3 months insurance and 3 months real estate taxes. These aren’t closing costs either, they’re known as “prepaids.” That is something that you are prepaying in anticipation of future mortgage payments to the bank and will be held in escrow to cover that.
Very often first time home buyers will want to ask the seller to pay closing costs. (Actually, what’s happening is that the closing costs are included in the purchase price). A typical amount to ask for in closing costs is $2000. This amount should comfortably cover standard closing costs and the prepaids mentioned in the previous paragraph.
Please keep in mind that I am not a lender and this post offers general information and should not be the basis of your decision when you make an offer on a home in Iowa City. You definitely need to talk to a professional before you do that!