Wow - is this closing cost too high? (PMI, loan, interest rate)

[guinness_to_go]

Can someone check the math here - I am looking to do a 20 yr refi with a pretty good interest rate and the closing cost seems very very high. On the original GFE, our numbers were about the same (we were going to put $2,300 down originally) and at that time, we had closing costs of $5,500 with no PMI.

Here is a snapshot of the fees worksheet:

http://www.thebluepotato.net/mortgage/closing2.jpg

[AngelBy]

I use the calculator of ziprealty.com with the loan amount of 244K, interest rate 4%, down payment 20%, it comes up with the closing cost $8,057 and cash to close is $60,872 (just estimate).

[guinness_to_go]

Thanks AngelBy!

[a_guerrajr]

i'm paying about 8K for a 240K home as well, so it's not that much off. usually if you go with a mortgage broker their 1% origination fee is the killer. banks tend to not have that fee if you are a member of the bank.

[phil treadwell]

Originally Posted by a_guerrajr

i'm paying about 8K for a 240K home as well, so it's not that much off. usually if you go with a mortgage broker their 1% origination fee is the killer. banks tend to not have that fee if you are a member of the bank.

That's not always the case. Most lenders (banks or brokers) will charge a 1% origination as an industry standard to offer a lower rate to stay competitive. Its not always an extra fee, and banks charge it just as often as brokers. Bottom line it's very important to compare APR's on the Truth-in-Lending disclosure with different lenders so that regardless of minor differences in rate/fees, you can find out who is offering the best deal.

To the original question, the reason your costs are so high is because you are paying single-pay mortgage insurance ($6,678). This is so that you do not have a monthly PMI amount, you are paying it ALL upfront. Your loan-to-value must be over 80% to have mortgage insurance at all. I rarely recommend the single-pay upfront over the monthly amount because it assumes you are going to stay in the property until you reach the 80% LTV when the monthly amount can be removed from your payment. If you don't stay that, you don't get any of the money back you paid upfront. You need to talk to another mortgage professional and get another quote, just rolling all of that into your new loan amount is not the best idea.

[a_guerrajr]

Very true ^

[399083453]

Its the single pay mortgage insurance which is the big expense. If you get rid of that, you could pay a higher interest rate. Depends what is more important to you. Less $$ now, or more $$ later.