Closing Costs $16,500!! Can the be right?

[DMenscha]

Originally Posted by Silverfall

In CA do buyers or sellers pay the real estate transfer tax. I'm wondering if the buyer is paying that in that 11,000 fee.

Sellers usually pay the transfer tax, but it's pretty small. .11% of the sales price.

[FalconheadWest]

You didn't list your "prepaid" items. To close on a loan, you must pay 1 full year of home owner's insurance up front. They will collect taxes from Jan 1 thru the day of closing in addition to about 3 extra months (credit back to you also from the sellers from Jan 1 thru closing, but they don't count the credit). You'll also have interest from the day of closing through the next month...

The difference is more than likely your taxes for your escrow account...

[f_m]

Originally Posted by curiosa

Here is the break down on the GFE form

Original Loan=$310,000
Amount financed:-20%downpayment= $248,000
interest rate= 4.875

• Origination Charge=$6,458
• Charges for all other settlement services(appraisal, creditreport, title services,government recording charges, transfer taxes, Home owners insurance =$11,956.98

As others asked, a big question is, are you paying points for a better rate? Although that is a 0 point rate today. My credit union did a slightly larger loan for under $3000 closing because they have no origination fees.

[Tish Thompson]

Are you using a direct lender or a mortgage broker? Brokers usually have inflated fees so they can make a little money from finding a loan for you. Talk to your loan officer. If the fees can't be changed, talk to your agent about the consequences of changing lenders mid-contract. If you can do so without penalties, find a new lender.

Originally Posted by curiosa

Currently at the tail end of escrow (2 months into it) & our closing costs for a $310,000 home in Los Angeles is currently around $16,500. I didn't realize it would take this long and be so much and we are not even closing yet. Just wanting to do a little survey to help gauge things since all of the mortgage/closing cost calculators online seem to give different calculations. If you could help shed light on whether this sounds correct or not that would be greatly appreciated.

Here is the break down on the GFE form

Original Loan=$310,000
Amount financed:-20%downpayment= $248,000
interest rate= 4.875

• Origination Charge=$6,458
• Charges for all other settlement services(appraisal, creditreport, title services,government recording charges, transfer taxes, Home owners insurance =$11,956.98

[DowntownVentura]

I agree with getting those costs broken down.

I bought a condo last year a bit more than your purchase price and here were my costs.

Escrow Fees(Title Insurance) $875.00
Recording Fee $12.00
Pest Inspection $75.00
HOA Document Fee $275.00
HOA Transfer Fee $135.00
Total $1372.00


There is no loan here but I wanted to give a good idea on what the non-loan charges typically are. This closed near July 1st and the seller (a bank) threw in the property taxes.

I think you are getting hosed by the bank.

[dad2jules]

A full understanding of what goes into an origination fee on the new GFE as well as the laws governing it and the affect it has on the client need to be understood to form an accurate opinion of what is high.

1- it includes lenders commitment fee- usually about $700
2- it includes both traditional origination that client pays as well as yield spread premium (what the bank pays the broker directly).

This number cannot go up at all for any reason other than the loan amount raising as they are based on a percentage of the loan amount. It is for this reason that if a rate is not locked when the GFE is prepared that overdisclosure will happen. If I know the loan is set up to have 1% origination paid by client + some YSP - the lowest available rate without paying discount points) I will disclose as at least 1.5% origination and lender commitmnent fee making the GFE look like about 1.75% originaiton depnding on loan size even though in actuality it will never happen.

If I was really planning on say .25% YSP when I quoted I can lower the orgination that the client pays by .25%. If I disclose the .25% YSP and when locking it pays .5% I get capped at .25% and the extra the bank keeps- it can't be used even if origination fee the client pays is lowered by this amount.

You can equate this to seller paid closing costs. If you negotiate $5000 and only use $4000 the other $1000 goes back to the seller. This just cost the client money the same way underdisclosing could cost the client money.

[stan4]

Maybe L.A. is different but I thought the origination fee was supposed to be capped at 1%! 6 grand?!! No f'in way. We just closed on a house on Wednesday that cost way more than that and we paid way, way less at closing (including a year's worth of homeowner's insurance).

[ShanetheMortgageMan]

A lot of comments but the OP never has come back to answer any of them. This appears it's a Fannie Mae or Freddie Mac conforming loan program (to put down 20% and go with FHA would normally not be a good choice). Fannie & Freddie have LLPA's (loan level price adjustments) if someone has a low FICO score, so if the OP has a lower FICO score they may have needed to pay more in origination fees in order to get that lower 4.875% rate (vs. someone with a 720 score would have the origination charges around $1k or so).

Other posters are correct, with the new GFE format the GFE discloses ALL closing costs no matter if the seller or buyer is paying them, and that includes the transfer tax and the owners title policy.

The correct place to find one's "funds to close" is on page 4 of the loan application under "Details of Transaction", which usually just has the closing costs/prepaids that the buyer/borrower is responsible for. Sometimes it'll still include the total figures from the GFE but then another line item would be a credit named "Seller portion of closing costs from GFE".

The new GFE is very confusing for those who are still used to the old format.