U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-23-2018, 09:22 PM
 
52 posts, read 159,124 times
Reputation: 20

Advertisements

This is what I got on an estimate from a direct small lender. I was told this closing cost is too high and I should shop around. If you think the quoted estimate is too high, how should I go about shopping around and then going back to the same lender asking him what others are offering. I have great credit scores, clean credit history, very good stable job etc.
Also I was quoted a higher rate (almost 0.25% than what other banks are giving) from the same lender and would like to negotiate to bring it down.
Its sort of overwhelming the amount of factors you have to consider in mortgage loan estimates. I feel lenders have an upper hand since first time home buyers like me are usually not knowledgeable enough to be able to negotiate with them.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 02-23-2018, 09:33 PM
 
7,090 posts, read 2,561,619 times
Reputation: 4515
The last I heard, which was admittedly almost a decade ago, closing costs were less than half of that but up to half. Twenty thousand is a lot of money. I would shop around, and if the closing costs are considerably lower somewhere else then most certainly do no go back to the other lender. You never go back to negotiate with someone who may be acting in bad faith.

Though, also be careful that lenders can hide fees. So, just because the closing costs look lower on paper, don't assume that they aren't built in.

Some suggestions:

1. Why not go to a credit union with a good reputation (probably the second best option)?

2. Why not look for a wholesale mortgage lender instead of a "small" middle market lender that likely specializes in higher risk loans (probably the third best option)?

3. Why not look for government regulated loan programs for first time homebuyers (probably the best option)?

4. Why not fish for a loan online and have lenders compete on rate and terms for your business? (this would be my last option after the previous three).

Also, see if you can find an advocate or a broker who works on a flat fee basis to find you your best mortgage with the understanding that they will work to get you he best deal instead of trying to build as much profit into it as possible.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 06:41 AM
 
Location: Bloomington IN
7,225 posts, read 8,860,121 times
Reputation: 18309
Is that amount truly just the lender costs or does it include other things such as insurance, title work, taxes, and perhaps the down payment amount? It sounds very high if it is really just the lender fees.

Lenders are required to give you a Loan Estimate that breaks down all costs. Parts of the estimate will vary from lender to lender based on the loan and the lender. Other parts should be fairly consistent from lender to lender (taxes, title work, attorney fees, etc.).

If you feel that lenders have the upper hand, I would recommend some internet research to better understand the form you're seeing and what it means.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 11:04 AM
 
52 posts, read 159,124 times
Reputation: 20
Quote:
Originally Posted by golgi1 View Post
The last I heard, which was admittedly almost a decade ago, closing costs were less than half of that but up to half. Twenty thousand is a lot of money. I would shop around, and if the closing costs are considerably lower somewhere else then most certainly do no go back to the other lender. You never go back to negotiate with someone who may be acting in bad faith.

Though, also be careful that lenders can hide fees. So, just because the closing costs look lower on paper, don't assume that they aren't built in.

Some suggestions:

1. Why not go to a credit union with a good reputation (probably the second best option)?

2. Why not look for a wholesale mortgage lender instead of a "small" middle market lender that likely specializes in higher risk loans (probably the third best option)?

3. Why not look for government regulated loan programs for first time homebuyers (probably the best option)?

4. Why not fish for a loan online and have lenders compete on rate and terms for your business? (this would be my last option after the previous three).

Also, see if you can find an advocate or a broker who works on a flat fee basis to find you your best mortgage with the understanding that they will work to get you he best deal instead of trying to build as much profit into it as possible.
So I just call up the credit union and ask them for a rate quote... They will want to run a credit check. I just had one couple weeks ago and probably will have one from the same direct lender soon. Wouldn't this hurt my credit score? Just not sure how to go about doing this?

Ideally I would like to have the lender compete for the rate.

Also, the closing cost does include taxes+home insurance which is coming out to be about 36.5% of the closing costs.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 03:17 PM
 
12,018 posts, read 9,312,186 times
Reputation: 13420
Quote:
Originally Posted by sLiKk View Post
This is what I got on an estimate from a direct small lender. I was told this closing cost is too high and I should shop around. If you think the quoted estimate is too high, how should I go about shopping around and then going back to the same lender asking him what others are offering. I have great credit scores, clean credit history, very good stable job etc.
Also I was quoted a higher rate (almost 0.25% than what other banks are giving) from the same lender and would like to negotiate to bring it down.
Its sort of overwhelming the amount of factors you have to consider in mortgage loan estimates. I feel lenders have an upper hand since first time home buyers like me are usually not knowledgeable enough to be able to negotiate with them.
You should look for a free first time homeowner class. They are usually run by non profit organizations and are held in a public location such as a library.

Last edited by LifeIsGood01; 02-24-2018 at 03:27 PM..
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 03:25 PM
 
12,018 posts, read 9,312,186 times
Reputation: 13420
Quote:
Originally Posted by sLiKk View Post
So I just call up the credit union and ask them for a rate quote... They will want to run a credit check. I just had one couple weeks ago and probably will have one from the same direct lender soon. Wouldn't this hurt my credit score? Just not sure how to go about doing this?

Ideally I would like to have the lender compete for the rate.

Also, the closing cost does include taxes+home insurance which is coming out to be about 36.5% of the closing costs.
You need to find out what the closing costs are for. 36.5% for that sounds low for a $20K closing. If you lived in an area where the property taxes were $1K a month and insurance cost $3K that would get you closer to $20K.

Closing costs are usually 2 to $% of the home cost.

If it's FHA you will also have an upfront mortgage premium

Here is a list of some fees that you may have https://www.zillow.com/mortgage-learning/closing-costs/

Also sometimes if you just put some earnest money down then they will add the rest of your down payment towards your closing costs, but it's not part of the fee.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 06:40 PM
 
46 posts, read 39,539 times
Reputation: 73
I think what is lost here is what sLIKk considers to be "closing costs". If your taxes are high and you are including tax escrow, then that could be driving up what you perceive to be closing costs. If escrows are not included in that number, then yeah those costs are very high.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 06:43 PM
 
621 posts, read 300,874 times
Reputation: 904
Quote:
Originally Posted by NewJerseyForever View Post
I think what is lost here is what sLIKk considers to be "closing costs". If your taxes are high and you are including tax escrow, then that could be driving up what you perceive to be closing costs. If escrows are not included in that number, then yeah those costs are very high.
I think op is including realtor commission.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 06:48 PM
 
52 posts, read 159,124 times
Reputation: 20
Quote:
Originally Posted by movedintime View Post
I think op is including realtor commission.
Tax+home insurance escrow is included and is about $7.5K

I dont see realtor commission in the estimate.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-24-2018, 07:05 PM
 
Location: Kansas City North
4,821 posts, read 8,234,287 times
Reputation: 8054
If the OP is buying a home, the realtor commission is most likely not their expense - it would be the sellers.

Closing costs might also include prepaid interest. If you closed on March 2 (or early in any month) you would have to pay 29 days’ interest at closing. That would be nearly an entire P&I payment. But you wouldn’t make your first real house payment until May 1.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top