My wife and I are looking to purchase our first duplex / house hack in Patchogue, NY.
I found a local lender who offered a pretty interesting product (at least from the standard stuff I've seen)
First Time Home Owners
Only 5% Down
Income Limits Waived for the Area we are Looking
Property we are looking at is asking $399k but we believe $350 is much more fair. We are willing to meet somewhere in between. The lender told me for about a sal price of $360k, expect closing costs to be around $17k.
Does anyone know about typical closing costs in the Suffolk Long Island area? I feel like that is a little high for a small duplex, at $360k. Am I totally mistaken?
There are several factors to this and your real estate agent and mortgage broker should have explained this to you. DM me the details, like taxes, HOI quote, etc and I can explain further.
Part of that $17k may be discount points or 1% Origination fee the lender is using to give you that rate. If you pay money up front, your rate will go down, and the problem is the amount you pay doesn't often make sense, given the marginal payment difference, for a very long time in the future. So ask your lender about discount points and origination costs.
Another way they might be doing the "no PMI" is there is actually PMI, however the lender is including it up front in lump sum. Lender-paid PMI (or LPMI) is a thing, and PMI doesn't have to paid monthly.
So I would get a Loan Estimate from the lender, ask about points and origination charges, find out of PMI is being paid in lump sum, and that might be the key to why it seems like such a good deal on the surface.