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.
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.
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.
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.
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.
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..
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
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.
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 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.
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.
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.
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.
