Closing Costs listed... please help?

[SmartMoney]

Originally Posted by tzakiel

Below are the actual closing costs for a home loan I am applying for. I don't know where to start... so many fees. Can anyone identify which fees are too high or should be taken off entirely? I know the builder is padding these to get my money!

I should note this is a sale of a new home in northern VA where land values are very high, so keep that in mind.

95% of my business is in Northern VA and your estimate is typical of an NVR estimate. 819 and 824 are actually 2 different companies, the builder company and probably where the loan is being sent to. When are you closing? RESPA was going to require builders to provide the same incentive whether you used their mortgage company or not, but they got an injunction in Federal Court last week for attorney arguments and were granted a 90 day delay. The regs that were to take place next week would have let you go anywhere and still receive the builder's lender credit. VA Tax Stamps are based on both the mortgage and the sales price, that's why they seem high. Also, in the State of VA, the seller pays the Grantor's Tax, EXCEPT the builders that re-write the contract. It is not customary for the buyer to pay this fee, but all of the builders have re-written the body of their contract.

If the courts uphold the new RESPA regulations, come 4/16/2009, builders will no longer be able to require you to use their mortgage company. (The National Assn. of Homebuilders have fought this hard).

But to answer your question, the few fees that are high are not so far out of line to pull your loan in hopes of a better deal, especially if you would lose any builder paid closing or builder paid upgrades.

[needrain]

Go to www.USAA.com and use the check rates menu and put all the info in(no personal info needed) and it will calculate the rate and also show you all the fees they charge and how much. They had low closing cost fees for our loan; less than 5000.

[rya700]

When shopping for a mortgage do you look for the lower interest rate or lower closing costs? I am a newby......

[rcarrillo]

Originally Posted by rya700

When shopping for a mortgage do you look for the lower interest rate or lower closing costs? I am a newby......

It depends on what you want... typically you will want a combination of the two. There is usually a tradeoff, you can take a higher rate and pay less in fees (or sometimes even a "no closing cost" mortgage) but you pay more in interest over the life of the loan. On the other end you can buy points to get a lower rate.

Key things to consider will be:

Do you have money to pay the closing costs? How long do you intend to stay in the home? What is the "break even" point, ie the amount of time you need to stay in the home to receive a benefit from the additional monthly savings?

You can always ask your lender to give you different scenarios and see which one fits best for you. A good broker/banker will advise you and as about your long term goals to help you choose the best option.