HUD Home closing costs

5 Replies

I've purchased a HUD condo for 76,000. I expected closing costs to be somewhere in the 3-3500 dollar range. I've just been given the HUD addendum listing seller payments and buyer payments, and the total I owe in costs in almost 8%. (6k) I suppose I should have expected more but my realtor told me to "expect to pay in the area of 3-4%" ($3,040) of sale price. Almost 4k of these costs are tied up in "Title services and lender's title insurance." This seems unreasonable to me but it's my first go at this, so I'm not sure. Luckily this is a property I intend to live in so I'm not overly concerned with any data for flipping or profit, just in a bit of shock at how high the amount has risen. Any thoughts?

That's sounds high at first glance, but on a HUD home in IL, the seller (HUD) does not pay the owners title policy (I believe), which can be around $1500-$2000. The rest of the title fees should be around $2000-$2500, and your lender fees should only be around $1000 without credits. So $6000 sounds about right, slightly on the high side, for all-in costs. Hope that helps.

I used to have the same problem with the hud deals. It used to be that HUD required you to use their title company for closings in Illinois and the fees were unbelievably high. I think it was upwards of 2,500 to 3k. They said that "they're all that high".

About 2 years ago or so, HUD changed their rules for us here and now allow us to pick our title company. I went with someone local and the fees are closer to 1,200 to 1,500 depending on the deal.

If you do another hud deal, I'd do some price shopping with the title companies and find one at a better rate. 3k for an 86k purchase seems ridiculous to me.....

the buyer pays all the closing costs including the seller's on a HUD purchase. I struck a deal with the old HUD closing company in Texas and I pay approximately $500 in closing costs plus a title policy if I desire to purchase title insurance