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Do people understand?

Another question got me thinking. I read a few answers from several questions over the last few days about buying a house and still getting food stamps. Regardless of your opinion on the subject, I saw that people were claiming how much money they spent on rent and how it would be cheaper to own a home. What about closing costs, down payments, and mortgage insurance? Just out of curiousity for those of you who own homes:
How much were your closing costs?
We bought our house 6 months ago and our closing costs were around $16,000 (including down payment).
Just thought I would shed some light on how expensive it is to buy a home....

 
kaylan010

Asked by kaylan010 at 9:55 AM on Jul. 28, 2010 in Money & Work

Level 20 (8,682 Credits)
This question is closed.
Answers (16)
  • It's not just the closing costs (ours were over $7k). It's home maintainence and repair, insurances, taxes, lawn care too. All those things are included in most people's rent, but when you own your own home, you have to come up with that money too on top of the mortgage payment. I think that some people are in love with the idea of homeownership and that's great because we all need goals, but they need to factor in reality too.
    slw123

    Answer by slw123 at 2:48 PM on Jul. 28, 2010

  • Ours was just under $3,000.00, but it was an FHA loan and our house was around $80k (now valued at around $50k because of the recession, ugh). I'm sure if we looked at a higher price range (which I would have liked), then we would have paid a lot more too. But it also depends on where you live, what the market is, what price range you are looking at, etc.

    The thing about renting vs buying a home is that you are putting that money towards something that belongs to you. You might be paying a little bit more, but it's all yours, it's an investment. With renting you're paying someone else's investment and you never see the results of it.
    thatgirl70

    Answer by thatgirl70 at 10:01 AM on Jul. 28, 2010

  • Sure it IS expensive to purchase a home, BUT if you do not by more house than you can afford, you should have no problem with closing costs and associated fees! Meaning you should have at least a 20% down payment, and your monthly mortgage payments should not exceed 30% of your take home pay! Ideally couples will buy a home based on ONE salary--even if both people work, and you should only ever agree to a fixed rate mortgage--even if you need to purchase points up front in order to reduce your monthly payments over the next 15-30 years!
    LoriKeet

    Answer by LoriKeet at 2:01 PM on Jul. 28, 2010

  • Oh I totally agree with making an investment, however I just wanted to show how expensive it can be to actually make the purchase.

    kaylan010

    Comment by kaylan010 (original poster) at 10:02 AM on Jul. 28, 2010

  • our closing costs were $0, and we had a $0 down payment.
    there is still the issue of taxes and insurance, but then you get tax credits and breaks for being a homeowner too.
    happy2bmom25

    Answer by happy2bmom25 at 10:04 AM on Jul. 28, 2010

  • I don't remember how much closing costs were. My husband works for the city and they have a program where the city paid for our closing costs, up front costs and $5000 towards our down payment (which was already hefty!). We bought our first house 10 years ago and I don't remember how much closing was then.

    As for cheaper than rent our house is cheaper than rent. A house down the street from us rents for $250 more than our house payment with taxes, insurance and such. We could easily rent our house for well over what our monthly payment is.
    kc932

    Answer by kc932 at 10:04 AM on Jul. 28, 2010

  • our closing costs were about $30,000 i think and we did not get a down payment.... we got a second loan for that (100% financing). but i do agree that it is better to be paying a mortgage than to pay rent. when you're paying rent you don't own anything in the end and you still pay about the same amount. and i am in a bad situation about this housing market (my house is worth $250,000 less than when we bought and the second loan for the down payment has a higher interest rate but of course we can't refinance the loans bc we have lost so much equity). i still think it's better to own than rent. and about the taxes.... that is factored into the mortgage payment so it's not really a out of pocket cost

    princessbeth79

    Answer by princessbeth79 at 10:10 AM on Jul. 28, 2010

  • I know that the first house I bought I rent a room for just under the mortgage payment. What makes that worse is that I was well below the average room rent in the town I was in. That has a lot to do with the fact it is a college town and I had a decent down payment.

    As far as closing cost, in my new house, the seller paid ALL of those. My current mortgage/insurance/taxes is about $500 less than renting would be. BUT, there are home maintence things that I have to pay for... no landlord to call.
    beanielips

    Answer by beanielips at 10:10 AM on Jul. 28, 2010

  • It is not cheaper to own a home ... not in Michigan anymore. My home, waterfront and in a very good neighborhood, has dropped in value. While it was assessed to be a wonderful investment when we bought it, I'm now upside down - now owe more than it's worth.
    We put $15,000 down and the seller covered closing costs. Mortgage/taxes/insurance bring my monthly payment to about $400 per month more than our last rental (similar size home) and keeping up with repairs, lawn/yard work, general maintenance is a significant expense as well.
    It's only an investment if it's not losing value and if you can keep it in a condition where it remains marketable ... and the value of the investment will depend largely on what the market is doing at the time you sell.
    aliceinalgonac

    Answer by aliceinalgonac at 10:22 AM on Jul. 28, 2010

  • When we bought our house in 03 our closing cost was $500! We did give the seller $1,000 earnest money when we bought the home. We were told to bring another $600 at closing, so that would have made the closing deal $1600 out of pocket for us. HOWEVER, because of the way the taxes turned out (sellers share and our share) we needed up with a CHECK for $500! Thus our closing cost was only $500. In other words we in a way got 1/2 of our earnest money back. Our actual mortgage, the P and I on the loan is $100 LESS then what our rent was! We however have an escrow account, so our monthly payments that we pay are $100 MORE then what our rent was! The escrow pays for our taxes and home owners ins.
    SAHMinIL2

    Answer by SAHMinIL2 at 10:23 AM on Jul. 28, 2010

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