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Old 02-07-2009, 05:31 PM
 
50 posts, read 183,902 times
Reputation: 45

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House is 112,000. I asked for 6% seller contribution, I put down 1,000 for earnest money....I need to bring 4100 to the table (thats like 200 more than my downpayment). consider the fact that i put down 1,000 for the earnest money already it like me having closing costs of 6% + an additional $1200. is that normal?

Underwriting fee - 795
admin fee- 440
processing fee-563
loan origination-500
3 months hazard insurance- 300
5 months property taxes = 1800
3 months flood insurance - 150
15 days interst = 286
FHA MIP FEE = 1891
Hazard insurance for year = 1127
Flood insurance year = 600
document fee = 250
Title insurance = 100
escrow fee = 290
supplemental summary = 60
recording fees = 108.00
flood survey = 590
transfer fee = 75
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Old 02-07-2009, 06:17 PM
 
Location: Atlanta, GA
331 posts, read 623,170 times
Reputation: 104
Let me break them up a little or you....

Lender Fees:

Underwriting fee - 795
admin fee- 440
processing fee-563
loan origination-500
document fee = 250

**I know you have an FHA loan, I do not know anything else about your situation...I do not know the level of service and expertise your loan officer has brought to you....AND ....lenders need to make money. I also do not know if you are getting a below market rate, what your credit score is, or what your overall situation is, or what state you are in, or how this lender is set up, Broker, Banker, or retail.....BUT...

To use Bank of America as a measuring stick - (I am only using them because they are a household name and they are the largest originator of mortgages in America - they do however take a LONG time to get you closed, and can be a total nightmare having you loan processed out of their loan centers, usually in a different state than you are in, lack of personal service, etc, etc, so take this comparison with a grain of salt) the only fees they charge on every loan are a $200 application fee and a $619 'lender fee" - and whatever origination fee (1% is standard in some states) or discount fee to secure a rate.

Every lender has a price structure per loan and I am not here to judge how another company makes money. Just simply looking at your fees --- my opinion is that it appears a little high based on a comparison to BOA.

The total lender charges are $2548 - using the comparison - if BOA charged you 1% loan origination fee - then their total fees would be $1899 - of which $200 would be credited toward you at closing.

Title Company/Attorney Fees
Title insurance = 100
escrow fee = 290
supplemental summary = 60
recording fees = 108.00
flood survey = 590
transfer fee = 75

*These have nothing to with the lender - you can take them up with the title company and/or attorney

Prepaid Expenses - AND to set up your ongoing escrow account
15 days interst = 286
Hazard insurance for year = 1127
Flood insurance year = 600
3 months hazard insurance- 300
5 months property taxes = 1800
3 months flood insurance - 150

*These are standard Nothing to do with your lender- it looks like you are buying in a Flood Zone and those are additional costs above a home not in a flood zone

FHA MIP FEE = 1891 - Nothing to do with your lender - This is financed into your loan amount...standard for FHA

Ask your loan officer intelligent questions, ask them why they charge those fees. If you feel like you have received great service and great knowledge then go with your gut. I know some loan officers do great work and their fees are well deserved - do you feel that way about your loan officer?

Last edited by bornandraised atl; 02-07-2009 at 06:27 PM..
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Old 02-08-2009, 09:38 AM
 
50 posts, read 183,902 times
Reputation: 45
Quote:
Originally Posted by bornandraised atl View Post
Let me break them up a little or you....

Lender Fees:

Underwriting fee - 795
admin fee- 440
processing fee-563
loan origination-500
document fee = 250

**I know you have an FHA loan, I do not know anything else about your situation...I do not know the level of service and expertise your loan officer has brought to you....AND ....lenders need to make money. I also do not know if you are getting a below market rate, what your credit score is, or what your overall situation is, or what state you are in, or how this lender is set up, Broker, Banker, or retail.....BUT...

To use Bank of America as a measuring stick - (I am only using them because they are a household name and they are the largest originator of mortgages in America - they do however take a LONG time to get you closed, and can be a total nightmare having you loan processed out of their loan centers, usually in a different state than you are in, lack of personal service, etc, etc, so take this comparison with a grain of salt) the only fees they charge on every loan are a $200 application fee and a $619 'lender fee" - and whatever origination fee (1% is standard in some states) or discount fee to secure a rate.

Every lender has a price structure per loan and I am not here to judge how another company makes money. Just simply looking at your fees --- my opinion is that it appears a little high based on a comparison to BOA.

The total lender charges are $2548 - using the comparison - if BOA charged you 1% loan origination fee - then their total fees would be $1899 - of which $200 would be credited toward you at closing.

Title Company/Attorney Fees
Title insurance = 100
escrow fee = 290
supplemental summary = 60
recording fees = 108.00
flood survey = 590
transfer fee = 75

*These have nothing to with the lender - you can take them up with the title company and/or attorney

Prepaid Expenses - AND to set up your ongoing escrow account
15 days interst = 286
Hazard insurance for year = 1127
Flood insurance year = 600
3 months hazard insurance- 300
5 months property taxes = 1800
3 months flood insurance - 150

*These are standard Nothing to do with your lender- it looks like you are buying in a Flood Zone and those are additional costs above a home not in a flood zone

FHA MIP FEE = 1891 - Nothing to do with your lender - This is financed into your loan amount...standard for FHA

Ask your loan officer intelligent questions, ask them why they charge those fees. If you feel like you have received great service and great knowledge then go with your gut. I know some loan officers do great work and their fees are well deserved - do you feel that way about your loan officer?
thanks for your response

my middle credit score was 680, 5% interest rate with half a point

my loan officer was also my real estate agent, the level of service was great, cant imagine it being much better

however, he led me to believe that with the 6% contribution, me already putting down 1,000 for the earnest money and 350 for my appraisal, id need to come to the table with an additional 2600-3000 dollars (my 3.5% downpayment is 3920, he said the earnest money and appraisal i paid for out of pocket could go towards that) somehow this is costing 1500 more than i thought it would

how do those title fees look to you? theres like another 125 in title fees but i didnt feel like typing it all out. im gonna ask him about it of course, i just wanted to get some input from an outside perspective since you guys wont have an agenda

thanks
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Old 02-08-2009, 10:19 AM
 
Location: Atlanta, GA
331 posts, read 623,170 times
Reputation: 104
The seller will contribute 6% or $6720 towards your closing - you will get credit for the $1000 EM and $350 appraisal fee - so the total 'credit' you will get at closing is $8070. So if you need to bring an additional $2600-$3000 to closing ---that means your total charges - (closing costs, prepaids, escrow, etc.) come in around $10,000 or so......

As a percentage of your sales price this comes out to be around 9%...seems high.....But your Hazard Insurance is unusually high based on what I have seen in my area - Atlanta - comparable insurance coverage for that sales price I have seen - $200-$300. You are in a Flood zone and that appears to be a significant cost - for the flood insurance and the Hazard insurance.

Between your property tax, flood insurance and Hazard insurance - that totals $510 per month - and to set up the escrow account itself is $2250.....these seem to be the eye popping fees that I see - they may be normal is your area - nothing you can do about that either....

I will not criticize someone's right to earn money - again it sounds like they are doing a great job for you --- if they are your Realtor and your lender, then they are getting paid on the sales commission and getting paid on the loan....this is not common in my area and I believe that FHA has verbiage about this---anyway---if you want to raise a question then I think you have every right to ask the question about lowering fees---they don't have to - but you can ask.....there is saying about you can sheer a sheep as many times as you want but you can only skin a sheep once.

Again - if they are doing a great job, delivering great service and expertise then they may be worth every penny. But you can always ask....bottom line - in my opinion based on my area and my experience - the lender fees look a little high based on my example, they are getting paid for the loan and the real estate commish-----the majority of your fees appear to taxes and insurance. Ask him these question and if he answers them satisfactorily then go with what you are comfortable with.
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Old 02-08-2009, 10:27 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,953 times
Reputation: 952
Quote:
Originally Posted by pleasesaythe4th View Post
thanks for your response

my middle credit score was 680, 5% interest rate with half a point

my loan officer was also my real estate agent, the level of service was great, cant imagine it being much better

however, he led me to believe that with the 6% contribution, me already putting down 1,000 for the earnest money and 350 for my appraisal, id need to come to the table with an additional 2600-3000 dollars (my 3.5% downpayment is 3920, he said the earnest money and appraisal i paid for out of pocket could go towards that) somehow this is costing 1500 more than i thought it would

how do those title fees look to you? theres like another 125 in title fees but i didnt feel like typing it all out. im gonna ask him about it of course, i just wanted to get some input from an outside perspective since you guys wont have an agenda

thanks

Pretty sure this is not compliant on an FHA loan. HUD is pretty specific about retaining only one real estate related license if you are working with HUD.
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Old 02-08-2009, 11:25 AM
 
50 posts, read 183,902 times
Reputation: 45
Quote:
Originally Posted by bornandraised atl View Post
The seller will contribute 6% or $6720 towards your closing - you will get credit for the $1000 EM and $350 appraisal fee - so the total 'credit' you will get at closing is $8070. So if you need to bring an additional $2600-$3000 to closing ---that means your total charges - (closing costs, prepaids, escrow, etc.) come in around $10,000 or so......

As a percentage of your sales price this comes out to be around 9%...seems high.....But your Hazard Insurance is unusually high based on what I have seen in my area - Atlanta - comparable insurance coverage for that sales price I have seen - $200-$300. You are in a Flood zone and that appears to be a significant cost - for the flood insurance and the Hazard insurance.

Between your property tax, flood insurance and Hazard insurance - that totals $510 per month - and to set up the escrow account itself is $2250.....these seem to be the eye popping fees that I see - they may be normal is your area - nothing you can do about that either....

I will not criticize someone's right to earn money - again it sounds like they are doing a great job for you --- if they are your Realtor and your lender, then they are getting paid on the sales commission and getting paid on the loan....this is not common in my area and I believe that FHA has verbiage about this---anyway---if you want to raise a question then I think you have every right to ask the question about lowering fees---they don't have to - but you can ask.....there is saying about you can sheer a sheep as many times as you want but you can only skin a sheep once.

Again - if they are doing a great job, delivering great service and expertise then they may be worth every penny. But you can always ask....bottom line - in my opinion based on my area and my experience - the lender fees look a little high based on my example, they are getting paid for the loan and the real estate commish-----the majority of your fees appear to taxes and insurance. Ask him these question and if he answers them satisfactorily then go with what you are comfortable with.
i think i owe 4100 in addition to the earnest money and appriasal i paid for

it says

contract price = 112,000
+
settlement charges to borrower = 9905
+
associtation dues = 488

GROSS AMT FROM BORROWER = 122, 393

Then it says

amounts paid by or in behalf of borrower

Deposit or earnest money =1,000
+
principal amount = 109,971 (they add in fha mip)
+
seller contribution = 6720
+
option fee = 50.00
+
county taxes from 1/1/09 - 2/10/09 = 252.90
+
aldine ids taxes = 236

total paid by borrower = 118,229

122,393 - 118,229 = 4163.56 due from borrower
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Old 02-08-2009, 04:19 PM
 
Location: Atlanta, GA
331 posts, read 623,170 times
Reputation: 104
Like I said it seems high to me----but it appears that the majority of the charges are coming from taxes and insurance and setting up your escrow account. The actual charges that the lender controls seem a little high based on the comparison I presented to you above - but by no means are the actual lender charges your biggest expense - it seems that the Homeowners, Flood, Association, and property taxes your biggest expense ---

I do not know where you are buying or why....but the biggest expense you can trim would be the Flood and Homeowners insurance - but that would be a whole new property etc, etc....

The bottom line is this ---If you like where you are buying, and you plan to be in the property for a long time, and this is an investment that you are making for the long term then factor those three things into your decision.

If this is a short term investment --- then based on what you have described - there are not many costs that can be trimmed by the lender - if the lender trimmed any costs then --- would it still make sense to you?

You appear to be buying in a flood zone, with very high insurance for the property, and very high taxes - you cannot change that----look at the long term investment and your opportunity costs vs. renting and see where you come out - you can deduct your mortgage interest, appreciation (if it ever returns), if you are a first time buyer you will receive a big tax credit - right now $7500 maybe more with the new bill working its way through the system-----

take it all in, analyze it, and make the right decision for yourself both now and in the future....
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