I know there are a lot of real estate people on this board so maybe you guys can help me out here.
My mother is going to be closing on a house today. Purchase price of the home is $188,500. Seller agreed to pay up to $7500 in closing costs. The Mortgage broker has now informed her that she needs to show up with a check for $188.96 at the closing table. Is it just me or does that seem like an incredibly high $ for closing on a $188k home?
Her realtor looked over the contract and none of the numbers are adding up. She may just walk away from the deal because she thinks the mortgage broker is giving her the shaft.
Any info would be appreciated.
Boozer, I just closed a couple of weeks ago on my house. You should have someone look over the contract who knows their shit. My wife is pretty smart when it comes to shit like this and she did find some hidden costs in our contract. I think this is how the mortgage companies make some extra money.
I'd find another broker. Didn't she get a good faith estimate at the beginning of the loan process? Is she paying any points on the loan? Is there any way you could itemize each amount on here?
Originally posted by totenhosen
I'd find another broker. Didn't she get a good faith estimate at the beginning of the loan process? Is she paying any points on the loan? Is there any way you could itemize each amount on here?
I agree.... You wouldn't believe how much they may charge you for misc pffice expenses... faxing
Many years ago when we bought our home for about that amount... The closing costs were around 2500.( not including property tax or insurance thx FB) ...
What state boozer? It can make a big difference.
In CA,
You'd probably be looking at:
Title ins - $900
Escrow/Settlement - $450-500
Recording - $100
Appraisal - $350
Notary - $125
File Margin/Pad - $300-$600(this may be up to 100% refundable)
Perpare grant deed - $100per instance
Those are fees that aren't under the Broker's control.
Loan related tems that will be additional are as follows and can vary greatly:
Underwriting Fee- 0-$1000
Funding Fee- 0-$1000
Processing Fee - 0-$500
Administration - 0-$1000 or more
Broker Fee- 0-$1000 or more
Orrigination points - 1 point = 1% of the loan amount and I've seen em as high as 5
Discount points - 1 point = 1% of the loan amount. These are used to "buy down" to a lower interest rate. Say Par was 5% for a 15 yr fixed and you wanted 4.5%, you would then pay points to buy down the interest rate of the loan.
Credit Report - 0-$20
Flood Certification - 0-$50
Interim/Prepaid Interest - Daily interest charge from the funding date to the end of the month. Fund on the 15th, and you'd have 15 days of interest to pay at closing.
There are a bunch of other names for fees, and I probably fogot to include something, but honestly $7700 could be high closing costs, or maybe she's getting a deal; it all depends on the details of her specific transaction.
If she is impounding her property tax bill and homeowners insurance, there are additional charges to fund the impound accounts. Borrower's always squawk about their prepaid items when they would have to be saving/paying for their insurance and property tax regardless of what they were doing with the financing.
One thing to remember, her Real Estate Purchase Agreement might have a penalty for non performance. In other words, if she walks from the deal when financing was available, she could be on the hook for monetary compensation to the seller. There are waaaay to many aspects to cover on a message board, so make sure she has a full grasp of her responsibilities under the sales agreement.
If you need further info, you can call me or pm me. Cell phone is 310-213-8119.
Hope that helps,
Chris
Buyers Closing Costs - Conventional Loan
The following is an example of fees/costs that a Buyer can expect to pay when purchasing a home with Conventional Financing:
Escrow Fees:
Base Escrow Fee ($1.95/$1,000 of sales price plus $195.00)
Loan Tie-in Fee ($200.00)
Messenger Fee for Loan Documents ($50.00)
Notary Fees paid to Notary ($10.00 per signature)
Audit Fee ($25.00)
Misc. Fees ($100.00)
Title Fees:
Lenders Title Policy (see title chart/ALTA policy - charges vary from company to company)
Sub Escrow Fee ($65.00)
Endorsement Fee ($75.00 - $100.00)
Recording Fees:
Grant Deed ($10.00)
Deed of Trust ($60.00)
Misc. Recording Fees (Quitclaim deed, etc. $20.00)
Title Company Wire Fee ($25.00)
Lender/Mortgage Broker Fees*
Loan Origination Fee (1.5% of loan amt. or ask lender for quote)
Loan Discount (1.5% of loan amt. or ask lender for quote)
Appraisal Fee ($350.00 - $450.00)
Credit Report ($50 - $60.00 per person on new loan)
Processing Fee ($250.00 - $400.00)
Underwriting Fee ($350.00-$450.00)
Lender's Inspection Fee ($75.00)
Document Preparation Fee ($250.00 - $400.00)
Tax Service ($75.00)
Flood Certification ($15.00 - $25.00)
Wire Fee to Lender ($25.00 - $100.00)
Prepaid Interest (Int. rate x loan amt. ) 12 ) 30 = per diem x # of days used Max. 30 days)
*(contact your lender for an exact quote of lender charges)
Other Fees/Charges
Homeowners Association Fees, if any: Prorations Impounds Fire Insurance (get quote from ins. agent) Flood Insurance (ordered only if required by lender)
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Note: The above information is only an approximate estimate of fees that a buyer may be required to pay and cannot be guaranteed. Fees will vary depending on the type of transaction or loan a Buyer is entering into. This information is designed to assist the Buyer in estimating costs. For a more precise estimate of lender charges contact your lender. Be aware that lender, title company and escrow charges vary from company to company.
She's on her way to the closing right now. A friend of mine has mortgage broker he is really good friends with agree to go to the closing and look over everything before my mother signs it. She's suppose to call me when it's all done and let me know how everything went and let me know whether or not she walked away. The seller is already aware of the problems and said it wont be a problem if she has to walk away from the deal due to a shady broker and will even be willing to reschedule the close date if need be for her to find another broker and get a better deal.
I'll let you guys know what I hear as soon as I hear it and I appreciate all the info.
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