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Old 06-21-2015, 09:44 PM
 
55 posts, read 81,959 times
Reputation: 29

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We are buying a house and decided to use the builder's preferred lender as they offered us about $4000 in closing costs.

Since the house is still being built, closing won't happen until 6 months from now. I have not sent the lender all the paperwork requested yet.

The lender quoted $16,000 in closing costs. I know that Texas is one of the states where closing costs are high. I personally thought that the figure the lender quoted was a lot higher than I expected. But since this is our first time buying a home, I have no point of reference whatsoever.

I wanted to hear from realtors or mortgage professionals what they think.

Some details:

Purchase price: $238,000

Downpayment: 5%

We are doing a VA loan. The VA funding fee is not included in the closing costs quoted.

I have been reading about the different items included in the closing costs and will be requesting section 800 items and costs from the lender. I did not even discuss the interest rate as I felt that at this point, it's too early and won't be able to lock it down anyway.

And other questions: Can I request the list of closing items that make up the whole $16,000?
Do I have to pay this lender any fees if I use someone else?
Should I be talking about interest rates when I have not given them the paperwork requested?
Should I continue to shop around to get the best deal?

Any advice is appreciated very much.
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Old 06-21-2015, 10:10 PM
 
109 posts, read 111,168 times
Reputation: 145
If you are getting a 4K credit, my guess is that $16k is your cash to close amount, which includes your 5% down payment. Yes, you can and will receive a breakdown of the fees. You only pay fees to the lender you ultimately go with. You won't be able to lock a rate until 60 days before close most likely, but can check where they currently are for comparisons with other lenders you may want to consider. Keep in mind that 4k credit likely comes at the price of an interest rate premium. I wouldn't send the lender any paperwork until it's rate lock time and you are 100% set on going with them.
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Old 06-21-2015, 10:30 PM
 
Location: Houston Metro
1,064 posts, read 1,193,637 times
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Aside from the down payment, Cash to close here in Houston also includes a lot of pre-paids like insurance, property taxes and other expenses used to seed the escrow account. Ask your lender for a good faith estimate to get a breakdown of the costs.
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Old 06-22-2015, 03:47 AM
 
Location: Phoenix, AZ area
2,932 posts, read 2,397,164 times
Reputation: 3357
Quote:
Originally Posted by haudi View Post
Aside from the down payment, Cash to close here in Houston also includes a lot of pre-paids like insurance, property taxes and other expenses used to seed the escrow account. Ask your lender for a good faith estimate to get a breakdown of the costs.
They are required to give you one within 3 days of your application acceptance. Closing costs include 6 months property tax, 1 year insurance, down payment, 2 months HOA dues. On top of that you can expect another 3% to 5% in other fees (lender fees, legal/title). If it's an FHA loan then there's a chance they aren't willing to finance the UMIP, this isn't normal but it can happen on new builds where you are financing lot premiums and other builder fees.
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Old 06-22-2015, 06:45 AM
 
Location: Phoenix AZ
5,920 posts, read 10,448,009 times
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As above, that figure looks more like 11,900 down + actual closing costs.
It's been a while, but the last VA loan I did had a very specific list of what a lender *could* charge a veteran -
Not to say you can't get hosed on a VA loan, but the government's requirements were such that it minimizes the potential for monkey business.

You're far enough out that i personally wouldn't lose any hair worrying about it.


If they didn't tell you yet, don't take out any other loans or move money around unless you absolutely have to.

Especially in the last 90 days before closing. - it can kink your loan worst case, or best case, the underwriters will want you to write an "explanation" letter for your file.


When you get closer to closing, you might try shopping for a va loan at your local credit union, just to compare apples to apples.
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Old 06-22-2015, 10:57 AM
 
3,318 posts, read 7,257,563 times
Reputation: 4100
Quote:
Originally Posted by MovingOut2012 View Post
We are buying a house and decided to use the builder's preferred lender as they offered us about $4000 in closing costs.

Since the house is still being built, closing won't happen until 6 months from now. I have not sent the lender all the paperwork requested yet.

The lender quoted $16,000 in closing costs. I know that Texas is one of the states where closing costs are high. I personally thought that the figure the lender quoted was a lot higher than I expected. But since this is our first time buying a home, I have no point of reference whatsoever.

I wanted to hear from realtors or mortgage professionals what they think.

Some details:

Purchase price: $238,000

Downpayment: 5%

We are doing a VA loan. The VA funding fee is not included in the closing costs quoted.

I have been reading about the different items included in the closing costs and will be requesting section 800 items and costs from the lender. I did not even discuss the interest rate as I felt that at this point, it's too early and won't be able to lock it down anyway.

And other questions: Can I request the list of closing items that make up the whole $16,000?
Do I have to pay this lender any fees if I use someone else?
Should I be talking about interest rates when I have not given them the paperwork requested?
Should I continue to shop around to get the best deal?

Any advice is appreciated very much.
If the $16k does not include the funding fee, that seems high. They might be charging origination and/or discount, then giving you the $4k "discount", which would make it meaningless.

Request an Itemization of Fees sheet. Even if it includes a full year of taxes, that seems really high to me. Like, twice as high as it should be.
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Old 06-22-2015, 04:39 PM
 
55 posts, read 81,959 times
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Quote:
Originally Posted by Pfhtex View Post
If the $16k does not include the funding fee, that seems high. They might be charging origination and/or discount, then giving you the $4k "discount", which would make it meaningless.

Request an Itemization of Fees sheet. Even if it includes a full year of taxes, that seems really high to me. Like, twice as high as it should be.
My sentiments exactly. I have been running my numbers with the 1 % origination fee plus a discount point, every other fee I can think of using high end numbers, 1 year home insurance and 6 months of property tax (about 2.3%) and I calculate about $10,000 +. Even if I added another $1000, thats just about $11,000, making the $4,000 credit worthless.

Quote:
Originally Posted by Zippyman;
It's been a while, but the last VA loan I did had a very specific list of what a lender *could* charge a veteran -
Not to say you can't get hosed on a VA loan, but the government's requirements were such that it minimizes the potential for monkey business.
And as @Zippyman stated, there are specific items that they can charge a veteran and I have also looked at a list of things that they cannot charge, specifically with origination fees if they charge the 1% origination fee.

Just trying to arm myself with knowledge so I don't end up shelling out more money for closing than I should.

Thanks for the comments. I specifically requested the section 800 fees from lender of which I am really interested at this point.
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Old 06-22-2015, 07:12 PM
 
3,318 posts, read 7,257,563 times
Reputation: 4100
VA non-allowable fees are sometimes offset with an Orig. fee, but I'd be at 3.75% or better**, with NO origination or discount points, a couple grand in Title Fees, like 500-600 total lender fees, and then 14 months of homeowners insurance and up to a year in property taxes at closing.

Taxes will likely be, what, $5-600 a month or so?




**For comparison purposes only, this is not intended as a solicitation.
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Old 06-24-2015, 08:44 PM
 
55 posts, read 81,959 times
Reputation: 29
Quote:
Originally Posted by Pfhtex View Post
VA non-allowable fees are sometimes offset with an Orig. fee, but I'd be at 3.75% or better**, with NO origination or discount points, a couple grand in Title Fees, like 500-600 total lender fees, and then 14 months of homeowners insurance and up to a year in property taxes at closing.

Taxes will likely be, what, $5-600 a month or so?




**For comparison purposes only, this is not intended as a solicitation.
That sounds a lot better. That's about the ballpark figure I was thinking about when we were thinking about closing costs.

Did you say no origination fees?

Taxes are at 2.3%. So about $450+ / month.
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Old 06-25-2015, 12:10 AM
 
3,318 posts, read 7,257,563 times
Reputation: 4100
Quote:
Originally Posted by MovingOut2012 View Post
That sounds a lot better. That's about the ballpark figure I was thinking about when we were thinking about closing costs.

Did you say no origination fees?

Taxes are at 2.3%. So about $450+ / month.
Correct.
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