Are these closing costs high? Need opinions - Baltimore, MD

[Tim Youse]

I'm looking to purchase my first deal in Baltimore, MD and have found a decent deal on a 3 bedroom for 79k that needs little work. The property should cashflow about $340/mo using property management and about $460/mo if i self manage. I got an approval letter from my local (national chain) bank and looking over the transfer/closing costs, they seem high to me with $15,800 down it's another $11,000 in charges and fees - so $26k out of pocket on an $79k house. Does this seem right or should I shop this deal around to see if I can get better terms. 

Here are the numbers:

30 year loan at 5.125%

Purchase price: $79,000

Down payment: $15,800 - (20%)

Charges and reserves: $11,554  (outlined below)

1) Closing costs

• Origination fee: $1,235
• Discount points: $1,027
• Appraisal: $785
• Credit Report: $45
• Flood cert: $8
• Tax Service fees: $82.50

2) Title Charges

• Closing Fee: $450
• Lender Title insurance: $279.80
• Title search: $200

3) Prepaids

• Hazard Insurance premium $1,200

4) Prepaid Reserves

• Hazard Insurance $1,300 
• Property Taxes $1,833
• Escrow Adjustment ($200)

5) Transfer charges

• Recording Fees $230
• Transfer Taxes $2,370

6) Settlement charges

• Owner Title Insurance $349

[Ola Dantis]

@Tim Youse Hey Tim, I'd probably shop around for another loan product. Here, the closing costs account for 14% of the purchase price. I'd say that is a little high. $27,354 on a 79k house equates to about 34.6% equity right off the bat. 

Now, on the flip side, if, for example, you are thinking that the value-add of $3,500 can significantly help increase the value of the house and you may be able to REFI in a year or less so that you can pull that equity out, then maybe it's worth it. 

Shopping around doesn't hurt at the end of the day. Let us know how everything pans out. 

Good luck. Thanks! - Ola