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Old 02-01-2009, 06:53 AM
 
4 posts, read 7,459 times
Reputation: 10

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Greetings,

My wife and I just got a GFE on an FHA loan for a $227,500 property in Philadelphia. Some of these fees seem high, but this is our first home so I'd love to get some feedback.

Rate: 5.75%
801 Loan Origination Fee (1.25%) $2744.21
802 Loan Discount (1%) $2233.78
810 Processing Fee $795
911 Underwriting Fee $750
1105 Document Prep Fee $86
1106 Notary Fee: $35
1108 Title Insurance: $1488.75
1108 Endoresement: $150
1108 CPL $35

I appreciate it.
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Old 02-01-2009, 10:03 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,953 times
Reputation: 952
The rate seems too high for a discount point, however without knowing more info on your specific scenario I can't say for sure. The 1100 line fees are third party so they are what they are, the lender/broker cannot upcharge those.

My first impression is that your loan officer is charging a "discount point" but it isn't a bonafide discount point (which by the way is illegal particularly on a government loan), based on the rate. It seems to me that they are using it to put more money in their pocket. Add that to any yield spread that they are making on that rate (unless you have a pretty low credit score even a government loan is paying back on 5.75% as of Friday) and the 1.25% origination fee (FHA only allows a 1% origination fee so this LO is not even in compliance)and it seems to me like your loan officer is gouging. Again, I don't know what your file contains so I can't say for sure. However, I would think that it would be a good idea to shop that around. I have a feeling that you can get better.
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Old 02-01-2009, 11:06 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,097,622 times
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what is the credit score?
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Old 02-01-2009, 12:17 PM
 
4 posts, read 7,459 times
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Thanks for the feedback--my wife and I both have credit scores around 770.
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Old 02-01-2009, 12:18 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,097,622 times
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two words


shop around!

but...dont settle with any lenders yet...especially if you haven't picked a house, and have a closing date.

Shopping around while not having a house picked will only blind your decision
If a lender knows you dont have a house then they just might offer you the best deal out there.
You may think that they're the best lender...but if you dont shop around the day you lock then you wont know if you got a good deal.
Most borrowers stay with the lender who offers the best deal.....even if it isnt the deal they get when they lock in the rate.

Quote:
Originally Posted by bkramer76 View Post
Thanks for the feedback--my wife and I both have credit scores around 770.
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Old 02-01-2009, 12:38 PM
 
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Thanks. We had been preapproved from three lenders, and another one did provide us with a GFE. So, hopefully I can use that as some leverage for negotiation.

Daddys///M3, to your point: my wife and I are getting a 6% sellers assist on our purchase. I'm wondering if they are inflating some of their numbers to make sure that full 6% goes into their pockets.

I do have one other question: The lender who provided us with the GFE I linked above is listed on the mortgage contingency section of the purchase agreement. If we wind up switching lenders, does that affect our agreement?
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Old 02-01-2009, 12:40 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,097,622 times
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I dont think it would but you would need to speak to a real estate attorney to give you legal information

Quote:
Originally Posted by bkramer76 View Post
Thanks. We had been preapproved from three lenders, and another one did provide us with a GFE. So, hopefully I can use that as some leverage for negotiation.

Daddys///M3, to your point: my wife and I are getting a 6% sellers assist on our purchase. I'm wondering if they are inflating some of their numbers to make sure that full 6% goes into their pockets.

I do have one other question: The lender who provided us with the GFE I linked above is listed on the mortgage contingency section of the purchase agreement. If we wind up switching lenders, does that affect our agreement?
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Old 02-01-2009, 12:43 PM
 
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Will do. Again, thank you for the insight.
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Old 02-01-2009, 03:34 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,953 times
Reputation: 952
Quote:
Originally Posted by bkramer76 View Post
Thanks. We had been preapproved from three lenders, and another one did provide us with a GFE. So, hopefully I can use that as some leverage for negotiation.

Daddys///M3, to your point: my wife and I are getting a 6% sellers assist on our purchase. I'm wondering if they are inflating some of their numbers to make sure that full 6% goes into their pockets.

I do have one other question: The lender who provided us with the GFE I linked above is listed on the mortgage contingency section of the purchase agreement. If we wind up switching lenders, does that affect our agreement?
Regardless, if you are being charged a discount point even if it is coming from seller concessions you should get the rate that coincides with that discount point. For example, as of Friday one of my less aggressive lenders was charging 0.11% for 5.75% on a 60 day lock. With this particular lender, using your credit scores as a basis, 1% discount point should get you to 5.25% on a 60 day lock. A 30 day lock with this particular lender will get you 5% with 1% discount point but with new construction or certain lenders a 30 day lock may not be feasible. Keep in mind that this is not a very aggressively priced lender, so there is likely even better pricing out there. And of course rates change daily and even multiple times a day so Friday's pricing will never apply to Monday.

Not saying that this would necessarily apply in your situation. However as renriq said you should really shop around.
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