Manufactured Home and Mobile Home Sales in Santa Clara County
Avoid Pitfalls at Closing by Understanding Closing Costs
CLOSING COSTS ON MOBILE/MANUFACTURED HOME PURCHASES
When purchasing a home, many buyers are not aware that besides the down payment funds, there are also other costs associated with purchasing a home. In order to avoid surprises and potential issues with the amount of cash required to close on the home, I have put together a list of the various closing costs that may impact your home purchase. With a loan, the typical closing costs can run $4,000-$5,000.
Loan Fees: If you are obtaining a loan through a financial institution, there will be fees associated with the processing and funding of that loan. These fees are usually a percentage of the loan amount and can range from $1,400 to $2,400. Some lenders will allow these costs to be financed into the loan. This essentially means that they are included in the "total" loan amount so you don’t have to provide cash for these fees at the time of closing.
Escrow Fees
: An escrow company is a third-party provider that real estate companies use to manage the purchase transaction. They hold your initial "good faith" deposit and assure that the property is free of any past owing taxes and that proper paperwork is completed to register the home with the Department of Housing and transfer the title into your name. The escrow fees range from $575 to $675, and with additional fees for title search, loan tie-in fees, and transfer fees, they will typically total around $800. Again, some lenders will allow these costs to be financed into the loan. This essentially means that they are included in the "total" loan amount, so you won’t have to provide cash for these fees at the time of closing. In Santa Clara County, it is customary for the buyer and seller to split the escrow fee, but this is a negotiation item.
Appraisals:
When a lender is involved in a purchase, they will require that an appraisal be performed to establish market value of the home. This typically runs $375 and is paid at the time of the service.
Property Taxes
: If you are purchasing that was built after 1982, it will be on the property tax rolls. This means two things for you: (1) you will have to pay property taxes every year, and (2) at the time of purchase, the lender will require a full year’s taxes to be paid up front in escrow. If you are purchasing a home that was built prior to 1982, there is a chance that the home is still on the registration rolls with the Department of Housing. The lender does not usually require this to be paid in escrow. Lenders will not usually allow property tax payments to be financed into the loan. This will be an out-of-pocket expense.
Insurance
: Depending on the amount of insurance coverage you wish to have on your new home, and depending on whether the home is in a flood zone, insurance costs range from $400 to $900 per year. The lender will require a full one-year payment at the time of closing. Even if you pay cash for the home, many parks require that each home carry the proper insurance. Lender will not typically allow insurance payments to be financed into the loan.
Inspection Fees
: If you have home inspections performed and they are not paid at the time of inspection, these costs will be a factor in the amount of cash needed at the time of closing. Termite inspections run about $175 and health & safety inspections run about $300.
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