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buying a house

When buying a house does the downpayment go towards the closing costs? My dh seems to think so but it doesn't sounds right to me

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MelSwim7

Asked by MelSwim7 at 2:23 PM on Aug. 30, 2010 in Money & Work

Level 17 (3,417 Credits)
Answers (14)
  • All I knew was I had to have 10% down...how they applied it is beyond me...
    WoodWitch

    Answer by WoodWitch at 2:24 PM on Aug. 30, 2010

  • No. I don't think so. The downpayment goes toward the cost of the house. The closing costs are assessed and paid separately.
    arouthier

    Answer by arouthier at 2:24 PM on Aug. 30, 2010

  • Ours was separate. We paid $8,000 toward our down payment and $3,000 for closing costs, but we only had to bring one check though.

    JeremysMom

    Answer by JeremysMom at 2:25 PM on Aug. 30, 2010

  • The downpayment goes against the cost of the home/how much you are financing (if you put $20,000 down on a home costing $120,000 you will be financing $100,000.) Closing costs are just that - the amount of money you need for points, accumulated interest, realtor fees, etc. Many times the buyer can negotiate the closing costs way down. Not the same thing, but are paid at the same time.
    Scuba

    Answer by Scuba at 2:25 PM on Aug. 30, 2010

  • Down payment is towards the house and closing cost is separate.

    musicmom08

    Answer by musicmom08 at 2:25 PM on Aug. 30, 2010

  • The closing cost is separate. But talk to your mortgage broker if you can't come up with it. I think you can work your closing costs into the mortgage itself.
    Anonymous

    Answer by Anonymous at 2:28 PM on Aug. 30, 2010

  • Take this for example   Mortgage Affordability Calculator


    Do you see closing cost in the calculation?  No, it's because it's not factored in there.

    musicmom08

    Answer by musicmom08 at 2:29 PM on Aug. 30, 2010

  • Down payment and closing costs are separate. However, it is possible to get the sellers to pay your closing costs (or part of them) as part of the sale.
    jilby

    Answer by jilby at 2:31 PM on Aug. 30, 2010

  • When they say 5% down, or $10,000 down that is short for down payment. Which goes towards the payments on the house. So say the home you wanted to buy is $100,000 and you put down $10,000- then your mortgage will only be for $90,000. Banks often times require a down payment to ensure that they get back what they loaned you. Chances are your $100,000 home will at least cover the $90,000 that the bank loaned out. Making it more worth their time if they have to foreclose on you.

    The closing costs can sometimes be rolled into the mortgage. So it is possible that your down payment, indirectly goes towards the closing costs though it is unlikely. Closing costs go towards- well closing fees. So things like title checks, and I believe most banks charge you a fee for your mortgage application.

    Again you might be able to roll the closing costs into your mortgage. Though that will end up costing you a lot more in interest.
    Erica_Smerica

    Answer by Erica_Smerica at 2:42 PM on Aug. 30, 2010

  • No, the downpayment does not go towards closing costs.
    JazzlikeMraz

    Answer by JazzlikeMraz at 3:04 PM on Aug. 30, 2010

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