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It has been my experience over the years that if I deal directly with a BANK that handles their own loans (not just a mortgage broker), then I can eliminate all the unnecessary bulls**t costs and pay only what is really necessary. You'll eliminate the escrow costs (taxes and insurance), mortgage fees, loan origination fees, and just about everything else except a title search, recording fees, and title insurance (and even that might be optional).
I forgot to mention in my last post that that ^^^ is exactly what I did. I refinanced with the same bank that held my mortgage, so they had 8 years of history with me. Their customer service is pretty wonderful.
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Wish the OP would come back and update us on his numbers, since they made no sense.
To see your real closing costs look at recurring and non recurring costs.
Recurring costs are prepaid interest, insurance and property taxes you have to pay over and over. They may ask for a few months reserves on the property taxes, etc to build up the impound account.
Ever notice you get a new loan the payment might be differed a month or two after close, well the bank is not giving you anything free. Interest is charged from the day they fund the loan, the deferment is because you prepaid those months upfront in the "closing costs", they might read as prepaid interest.
Non Recurring are one time costs like escrow, title, Appraisal and underwriting fees. No so much as a rip off as the appraiser likes to be paid for his/her work, the title company for insuring you are getting clean title, underwriters and escrow companies also like to get paid for their work too.
If you don't like coming out of pocket to pay these fees ask them to raise the rate a little (like a quarter of a point etc) and give you a lender credit to help cover those non-recurring costs.
This is absurd. Please tell me how these companies can get away with ripping people off. Please tell me why a 650k house requires a 9k closing costs but a 200k house only requires 3k. Please explain to me why there's an extra 6k for the bigger house..
When I tried to refinance my house last year, I receive the following quotes:
1) Original Lender. Total Closing Cost - $12,646. Interest rate at 3.5% (30 yr. fixed)
2) Alt. Lender #1. Total Closing Cost - $7,385. Interest rate at 3%
3) Alt. Lender #2. Total Closing Cost - $3,644. Interest rate at 2.88%
Total closing costs really can't be compared from one mortgage to another. They include prepaid interest, and reestablishing escrow reserves. All of those are based on INDIVIDUAL costs.
The size of the loan, points and some other factors also affects the cost of your loan. It impossible (even silly) to compare closing costs with another person's refi/mortgage.
Total closing costs really can't be compared from one mortgage to another. They include prepaid interest, and reestablishing escrow reserves. All of those are based on INDIVIDUAL costs.
The size of the loan, points and some other factors also affects the cost of your loan. It impossible (even silly) to compare closing costs with another person's refi/mortgage.
In my case,
The commonality is me, as an INDIVIDUAL, with the same loan amount, on the same property, same market value and at the same time (prepaid interest).
The difference is what each loan company offers in term of points, interest rate, how much they decide to charge me on the "junk fees", and what they considered necessary as "pre-paid interest". For example, one company wanted my whole year property tax paid up front to them while the others did not insist on this. Why would I do that since I am more than capable in paying my own property tax?
At the end of day, all I care about is how much it costs ME. That's the discriminator.
Total closing costs really can't be compared from one mortgage to another. They include prepaid interest, and reestablishing escrow reserves. All of those are based on INDIVIDUAL costs.
The size of the loan, points and some other factors also affects the cost of your loan. It impossible (even silly) to compare closing costs with another person's refi/mortgage.
Quote:
Originally Posted by HB2HSV
In my case,
The commonality is me, as an INDIVIDUAL, with the same loan amount, on the same property, same market value and at the same time (prepaid interest).
The difference is what each loan company offers in term of points, interest rate, how much they decide to charge me on the "junk fees", and what they considered necessary as "pre-paid interest". For example, one company wanted my whole year property tax paid up front to them while the others did not insist on this. Why would I do that since I am more than capable in paying my own property tax?
At the end of day, all I care about is how much it costs ME. That's the discriminator.
You are 100% correct. My wording was incorrect. Instead of saying "Total closing costs really can't be compared from one mortgage to another " I should have said "Total closing costs really can't be compared from one BORROWER to another ".
Do these closing costs include the impound account and prepaid interest?
Prepaid interest is paying a month or two mortgage payment into the closing costs, hence why your first payment is pushed out a month or two.
You also pre pay property taxes and insurance too. Not a rip off because you have to pay anyways. Because we are close to NOV-DEC when most property taxes are due they have to collect for the all the previous months in your current impound account, your current lender should give you a refund of the balance you have now in that account, usually 45 days of closing.
Look at non recurring costs, those are the real cost of the loan. The recurring costs are fees you pay anyways, so they should not be of no worry.
There are many great options out there, like take a rate with a lender credit and pay next to $0 in costs. It's being done every day.
Sorry… How does that work?
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