Are these closing fees too high?

[Regan Coakley]

I am a first time investor and am purchasing an investment property in Baytown Texas for $200,000 (single fam). I was expecting the closing costs to be around 3% but they are closer to 7-8%. Is this reasonable? I am using guaranteedrate.com they quoted me an interest rate of 3.625% and my credit score fluctuates between 780-800. First property purchase. Thank You.

[Andrew Postell]

@Regan Coakley thanks for posting and just a coincidence I guess.  Always great to hear from a fellow Texan. Bigger Pockets does have some good state specific forums and Texas is their most active forum. Feel free to post there if you ever need some more "local" advice about things. 

What we cannot see here is what your purchase contract states.  In your offer it would have been negotiated who is paying for what....meaning, who is paying for the title insurance - you or the seller?  So if the seller is paying, then that title insurance charge below won't be your responsibility.  But your contract might say that you are paying it.  Same with the survey fee.

Also, while your paperwork seems to show a charge for the full property taxes, that will not be the case...because the seller is responsible for their portion of the property taxes.  Basically, they pay the property taxes up until the day of closing...the day you have ownership.  Once you own the property, then you will be responsible for the remaining portion of the year of property taxes.  So while they are required to collect a full year of property taxes you won't be paying that entire amount.  

So ask your loan officer to update these fees based on your purchase contract and that should help you with making your fees more accurate.  Hope this helps but feel free to ask anything else if you need.