Let's assume the purchase price is $315,000 and the loan amount is $283,500.  Some costs are based on the loan amount, so we need to make some assumptions.  Since the costs vary only slightly if the sale price changes, this should be a fair idea of what the costs will be.  I will total all of this up at the end after I break it down from the simplest to understand to the hardest to understand. (Note:  I round up so that at the end there is a little buffer for variances.)

Total cash needs at time of closing $7,600.00 less any seller credits built into the offer.   Add the $900 you already paid for the Home Inspector and Appraisal, and you have $8,500 plus your downpayment of $31,500 and that equals a grand total of $40,000 less the $10,000 you put up front as an Earnest Money Deposit.  Before closing $10,900 will be paid and the day of closing you bring your Driver's Licenses and a Cashiers Check Payable to Escrow in the amount of $31,100.  Costs $8,500  downpayment $31,500.

Here's a breakdown.

Escrow fees are split 50/50 between the buyer and the seller.  These fees are based on Legacy Escrow, and can vary from one escrow company to another.  The buyer's half is $539.06 including tax and an additional $108.90 for the second mortgage.  The seller pays for owners Title Insurance and the buyer pays for Lender's Title Insurance, which should be about $465.00 plus $40 to record the second mortgage.

Add about $100 for recording fees to record the new deed with the County and $50 or so for misc Delivery fees.

Actually that $1,350 total are the only real COSTS except for your lender fees, which are the largest cost item.  You can lower the 1% origination fee, but that usually increases your interest rate.  There are loan processing fees, underwriter fees, flood cert, tax service and lots of miscellaneous fees associated with the type of loan you will need.  The lender fees alone will be about $4,000, so added to the other closing costs, let's call it $5,500.00.

At $5,500 we are still less than the $6,000 I estimated could be built into the offer, as a seller credit.

But we also have fire insurance, say $600 for a one year policy paid up front.  Plus $150 for three months toward next year's insurance policy to be put into the lender escrow account.  That's $750 for insurance.  Then we have real estate taxes of $270 or so a month.  If you closed at the end of November, you would have to pay $270 to the seller who already paid December of 2006.  Then you would have to pay 3 months or so to the lender, so he can pay six months worth of taxes come April.  So $270 + $270 x 4 = $1,355.00.

So if you build in $6,000 toward closing costs, less $5,500 for costs, equals $500 left. Then $750 for insurance costs equals $250 you would need at closing pus the $1,355.00 equals $1,605.00.  Let's call that $1,600 as I rounded the taxes up on the monthly.

$1,350 in costs + $4,000 lender fees + $600 ins + $1500 in Prepaids (prepaid taxes and insurance)

My commission that we discussed up front is not included, as that is paid from the Seller's Net Proceeds.

Let's total that again.  $1,350 costs  + $4,000 lender fees + 750 ins + $1350 RE taxes  + 400 for home inspector + $400 for appraisal equals $8,250 that I rounded up to $8500.00 plus 10% of the Purchase Price for a downpayment.  You may be able to build in $8,000 as a seller credit.  We won't know that until you find a house and make an offer.

Until we identify the house in question, I cannot firmly determine who will be paying the closing costs.  But in the $300,000 give or take price range, many, if not most comparable sales, would have had $6,000 or so in closing costs paid by the seller built into the price.  Consequenty, for valuation and negotiating purposes, it will likely be best for Adrianna to request $6,000 in closing costs from the seller in her eventual offer.

Before we get to "cash TO close", let's talk about cash BEFORE close needs.  At time of offer, an Earnest Money deposit of $1,000 or $5,000 or $10,000 will be in order.  The more you like the house, the more certain you are that "This is the ONE!", the higher the Earnest Money deposit.  Since the downpayment is expected to be $30,000 to $33,000, an Earnest Money deposit is simply and advance against the downpayment. 

On the one hand, if there are any doubts about the house you should maybe try to get away with $1,000.  On the other hand, $1,000 sends a clear message that you may have doubts about the house.  It's a catch 22. 

Besides the Earnest Money Deposit at time of offer, there are two other out of pocket expenses before you close on the house.  One is the Home Inspection fee which is about $400 and the other is the Appraisal Fee which is also about $400.  Possibly $900 for both.  These monies are gone, once spent, whether you buy the house or not.

Next we will examine how much of the total cash to close is expected to be met by the $6,000 requested of the seller in the offer.  Let's see if Adrianna has any questions regarding this part before we move on to the costs at tome of close.