Is 6k closing cost too high for a 410k loan?

[f_m]

Originally Posted by duhrambull

My credit score is 790, i guess i should get the best rate out there.
There is an additional $2852.49 estimated prepaid and escrow costs.

I think i need to have a good talk with the broker tomorrow morning.

If you want to minimize some of the prepaid interest, then try to close at the end of the month.

[fairmarketvalue]

Originally Posted by rcarrillo

You need to compare apples-to-apples though. Closing costs and interest rates go hand in hand. We can do no closing cost loans if a customer wants, but the rate will of course be higher. Or they can pay 1% origination fee if they want a lower rate. Or 2 points to get an even lower rate at a much higher cost.

You can always trade closing costs with interest rate/monthly payment as best fits your situation.




Luckily here in Central NC we have a fraction of what FL has. No flood insurance and home insurance is much lower. Insurance will be $900 tops but that could still mean $1500-2000 total.




True, but don't forget rates can be different from state to state. Some states have special adjustments even with major banks like Wells or Citi. As of today many lender had 5.625% with 1% origination, but since we don't know all the details of his transaction we can't say if the quote he has is too high or just right.

As a CPA who used to work in the mtg. industry (not a broker but in corporate acct.), I can tell you this is a "line of bull". Origination fees are nothing more than "broker commissiions", disguised by nothing but junk. The OP has a great credit score and I'm sure he qualifies for the lowest rate possible WITHOUT paying ANY points! This game was played for the "not so qualified buyers" and why brokers were making a killing. Of course they were going to push a loan through, regardless of credit and as long as they showed a decent interest rate, even though they convinced the clients the "needed to buy points to get it" BS, all was good in the mtg. co. pockets. So as stated earlier, your "origination fee is HIGH", ask your broker to fix it and get you the rate you want, or threaten to go somewhere else. Your credit is good so don't get insecure and just find the bank/broker willing to give the loan on your terms.

[PotterGeek]

My closing costs were total of $5207.54 on a loan amt of $161,500. That includes my origination fee of .75% ($1211.25). Our credit scores are 760.
That does not include my downpayment and my HOA fees for the year...
AND I was able to get out of the mortgage state tax/stamp fees since we were financing through our credit union and they were exempt from those fees.
We bought in Atlanta...

[TimtheGuy]

Originally Posted by fairmarketvalue

As a CPA who used to work in the mtg. industry (not a broker but in corporate acct.), I can tell you this is a "line of bull". Origination fees are nothing more than "broker commissiions", disguised by nothing but junk. The OP has a great credit score and I'm sure he qualifies for the lowest rate possible WITHOUT paying ANY points! This game was played for the "not so qualified buyers" and why brokers were making a killing. Of course they were going to push a loan through, regardless of credit and as long as they showed a decent interest rate, even though they convinced the clients the "needed to buy points to get it" BS, all was good in the mtg. co. pockets. So as stated earlier, your "origination fee is HIGH", ask your broker to fix it and get you the rate you want, or threaten to go somewhere else. Your credit is good so don't get insecure and just find the bank/broker willing to give the loan on your terms.

Here we go again with FMV. You have no idea what you are talking about. Yes, you can always get a deal with no origination fee and no points and the rate will always be higher than if you paid them. There are many factors that go into figuring out whether or not you should pay an origination fee and/or discount points. To say no borrower should ever pay them is retarded.

What is "qualifying for the lowest rate possible". The lowest 30yr. fixed rate on my sheet today is 5.25%. Do you think you can get that rate with no points/origination fee because you are an A+ borrower? Not a chance. Maybe with about 4+ points/origination fee. Do you understand what par price is (price is 100.0) where the lender/broker makes $0 on the "back end"? Let's say the par price is 5.75% today, do you think you can get that rate by paying 0.0% origination and 0.0% points? Of coarse you can't. On a good sized loan amount like the OP you can expect an average charge of anywhere from 0.75%-1.25%. This will be the lender's income on the deal.

You should stick to bean counting instead of slinging bad mortgage advice.

[rcarrillo]

Originally Posted by fairmarketvalue

As a CPA who used to work in the mtg. industry (not a broker but in corporate acct.), I can tell you this is a "line of bull". Origination fees are nothing more than "broker commissiions", disguised by nothing but junk.

Just because you worked at a chop shop that pocketed junk fees doesn't mean that everyone else does. So please, the bull is that any advice is always 100% the same across the board. Do you advise every client to take the same financial position regardless of their situaiton?

No, its the same with points and origination fee. They can be junk. One broker could charge 3 points and give someone a higher rate than they could get with 0 points from an honest broker. Thats the nature of the business.

However, if you are working with someone honest they will give you a lower interest rate if you pay more in fees. Its a tradeoff. Say a loan officer wants to make 2% of the loan amount. They can charge you 2% and give the buyer par rate. Or they could charge 1% and make 1% commission. Or they could charge $0 fees and make 2% commission.

Its a TRADEOFF. If you have someone honest, they can show you these options. Or you can go to someone that spouts off absolutes and how you are getting a great deal and not explain one thing about how mortgages work.

Originally Posted by fairmarketvalue

The OP has a great credit score and I'm sure he qualifies for the lowest rate possible WITHOUT paying ANY points!

WRONG. He qualifies for the lowest rate possible WITHOUT paying ANY points that someone paying NO points will get. If that rate is 6%, that is what he gets. If he then pays 1% origination (aka, 1 point) then he can get the lowest rate possible for someone paying 1 point. Maybe that rate is 5.75%.

Then the question is whether it is worth it to pay that 1% to save the .25% in interest rate. But the buyer IS getting a benefit from paying the 1%.

Of course this assumes that the lender doesn't just pocket the 1% and give the buyer a 6% rate. I understand that is what you mean and you are correct... it happens. But don't go giving blanket statements..... "lowest rate possible" is great, but you have to define this by clairfying as possible under what conditions.