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Old 06-01-2018, 09:43 AM
 
356 posts, read 241,650 times
Reputation: 343

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Quote:
Originally Posted by LifeIsGood01 View Post
If you don't understand the home buying process you should not buy one, or wait until you can buy one with cash.

A mortgage is a large loan. They can't just trust you to pay your taxes or insurance.

and guess what and this will drive you crazy.

Not only do you have to pay it monthly. You have to pay a whole years taxes up front.

and not only taxes but property insurance too.

and HOA fees if there are any.

Oh and they can go up too if the taxes or insurance were calculated too low becuase of what the previous owner was paying. So your monthly payment can go up too. The escrow portion can go down too, if you live in a state like Florida when the homestead exemption kicks in. Also if you do live in Florida or a hurricane prone area and get a wind mitigation report afterwards or get shutters for all your windows it can go down too.

If you are worried about $14 you can't afford a home or it will drive you crazy there are a lot of other fees too, surveys, inspections, appraisals, document fees, etc.
Its not about being "worried" about $14 dollars its the fact they went out of their way to itemize a thing that really should not have been. Its nickel and diming when they already will receive 82% of the loan in interest over the life of the loan (30 years).

They go, "we'll get $94,300 in interest over the life of this loan, better go ahead and charge him $14 for the credit report. Gotta keep the lights on! "

Its the principle of the matter, Auto dealers dont do this or at least, its rolled into the document fee.

I dont know any other 25 year olds with $120K in cash, in fact, I dont know anyone in my town except for a few very rich folk. This is rural Western NC. No one pays cash. Im just jaded at their blatant rapacity.
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Old 06-01-2018, 09:46 AM
 
356 posts, read 241,650 times
Reputation: 343
Quote:
Originally Posted by LifeIsGood01 View Post
If it's "only" $500 what's the big deal? it will be there in your account and collected monthly and set aside securely and you don't have to worry about it.
Thats fair, but Id like to have the option to pay my own taxes like ive always done. I suppose enough idiots have screwed them in the past that they now require this for most people now.
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Old 06-01-2018, 09:50 AM
 
10,265 posts, read 6,495,798 times
Reputation: 10837
Quote:
Originally Posted by juggar View Post
Thats fair, but Id like to have the option to pay my own taxes like ive always done. I suppose enough idiots have screwed them in the past that they now require this for most people now.
It's generally standard with most mortgages. I prefer it, they collect it and I don't have to worry about it. You can pick your insurance company and any deductible that is allowed. They usually also keep 2 months extra in escrow. Any overage due to changes should get refunded via a check and a mortgage payment reduction and any increase will increase your monthly mortgage. and it's not now, it's nothing new.
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Old 06-01-2018, 09:54 AM
 
10,265 posts, read 6,495,798 times
Reputation: 10837
Banks and other lending institutions have to pay for credit checks. I'm sure they pay some flat amount to do unlimited ones, but they do have to pay for them.

Also when I started applying for preapprovals each bank had to run one, the only bank that gets paid for the credit report is the one you get the mortgage with. so they are basically free until you close on a home. I didn't look to see if or how much they charged for mine, it wasn't a deal breaker, I just wanted to buy the home, escrow and other fees did not bother me, I did avoid loan origination fees, but if it was the only option to get me into my house I would have paid it.
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Old 06-01-2018, 09:58 AM
 
Location: Columbia, SC
8,844 posts, read 17,440,566 times
Reputation: 6194
It's their money so they can dictate the terms. It's common to require taxes and insurance be escrowed. That's how the lien-holder knows the taxes and insurance gets paid. They are simply protecting their collateral. If you have a problem with your ratios perhaps you should consider a less expensive or save a larger down payment.
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Old 06-01-2018, 09:58 AM
 
95 posts, read 38,937 times
Reputation: 48
Quote:
Originally Posted by juggar View Post
Its a USDA guaranteed loan, is it possible to opt out of this?
very difficult. USDA are great loans (for buying in certain geographic areas), and there are added protections for the buyer (as much or more than with an FHA loan) - but the flip side to this is more requirements (Escrow accounts, full documentation of income, etc, more paperwork in general than conventional loans).

there are conventional loans that work with downpayment assistance (I've helped some clients get into a home with only $1,100 out of pocket - and the 3-5% downpayment is a true grant that never has to be repaid), but the requirements for taxes and insurance to be impounded into an escrow account remain.
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Old 06-01-2018, 09:59 AM
 
Location: Rochester, WA
3,828 posts, read 2,050,555 times
Reputation: 10557
Quote:
Originally Posted by juggar View Post
I understand they need to protect their interest, but its literally only $500.
Which is why it would be silly for them to risk a tax auction on this property.

If you have significant equity in the home, due to a big down payment or years of payment history, they may wave this, otherwise, get used to it It's a cost of owning a home with a mortgage. So is the $14.

I hope you can get past these little annoyances and enjoy your new home.
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Old 06-01-2018, 10:01 AM
 
10,265 posts, read 6,495,798 times
Reputation: 10837
Quote:
Originally Posted by LMC White Collar View Post

there are conventional loans that work with downpayment assistance (I've helped some clients get into a home with only $1,100 out of pocket - and the 3-5% downpayment is a true grant that never has to be repaid), but the requirements for taxes and insurance to be impounded into an escrow account remain.
Some of those grants never have to be repaid but with an asterisk. Normally you have to live in the home a certain time, such as 10 years to not have to repay that grant. Grants are generally not given out so you can live in the home a year or less and then profit from the grant if you sell.
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Old 06-01-2018, 10:05 AM
 
Location: Gallatin Valley
490 posts, read 1,138,220 times
Reputation: 407
Our credit report fee says $33
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Old 06-01-2018, 10:06 AM
 
Location: Salem, OR
13,741 posts, read 31,556,293 times
Reputation: 12105
Quote:
Originally Posted by juggar View Post
Its a USDA guaranteed loan, is it possible to opt out of this?
No. You are buying a home insured by the federal government so you play by the government rules. You can do 20% down conventional and most lenders will allow you to pay your own taxes and insurance with that type of loan.
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