First time home buyer, are the closing costs too high?

[Maria N.]

First time home-buyer trying to house hack on a 3-family home using an FHA in Troy, NY. I found one for $260,000. Monthly payments would be $2065 with an interest rate of 2.875%. With utilities & flood insurance, it'll be more like $2400. Once I move out, I'll be making around $3400. I was originally worried because of the really high property tax (3.5%), but the cash flow checks out so I looked past it.

Now I'm in the process of signing documents to close, and I saw, for the first time, just how high the closing costs are going to be. I'll be paying around $16,000... not including the down payment of $9100. Of that, $6120 are for 8 months of property tax, but this doesn't cover the next year, it only covers up until November (the month before my first monthly payment would be due), and back pay to the seller for their property and school taxes. I was expecting max 4% of the property value in closing costs, this is over 6%. Is this still a good idea? I could easily afford it, but the whole point of the FHA for me was to put as little of my own money down. I could use your advice!

Here is a breakdown of the closing costs: 

- 0.25% of loan amount (points): $638
- Origination Fee: $895
- Appraisal Fee: $575
- Credit Report: $66
- Flood Certification: $7
- Inspection fees: $125 (only applies if appraiser requests fixes)
- Title - Settlement Fee: $495
- Title - Courier/Overnight Fee: $75
- Title - Endorsement: $150
- Title - Lender's Title Insurance: $1252
- Title - Mortgage Payoff: $75
- Title - Searches: $265
- Title - Wire Fee: $75
- Recording Fees and other Taxes: $320
- Transfer Taxes: $2553
- Homeowners Insurance Premium (12 months): $780
- Homeowners Insurance (2 months reserves): $130
- Property Taxes (8 months): $6120
- Personal Rep Fee/Borrower's Attorney Fee: $650
- Title - Owner's Title Insurance: $685 (optional but I will get it to be safe)
- Daily Interest 11 days: $221.19