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      09-04-2012, 08:29 PM   #1
kevinbahnz
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Closing Cost Fees.

I have an estimate on a loan and the closing fees add up to $3077.00 for a $120k loan. Does that sound about right? The rate they gave me is 2.875 15yr fixed. i could attached the itemized fee worksheet if necessary. Thanks in advance.
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      09-04-2012, 09:12 PM   #2
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Sounds too high...list the specifics
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      09-04-2012, 09:45 PM   #3
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FEE_SHEET.pdf
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      09-04-2012, 10:01 PM   #4
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I just bought a house being built in Vegas for 240,625. The closing cost is 5,969.35 and I have a 30 year loan 3.25 fixed rate.
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      09-04-2012, 10:04 PM   #5
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Low interest rate, high fees. Low fees, higher interest rates.

I just closed on a $400k LOC for my business, closing fee was $4k with a prime plus .75 rate. Prime plus 1.75 nearly cut the closing fee by half.
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      09-05-2012, 02:48 AM   #6
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Which lender are you working with?
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      09-05-2012, 07:25 AM   #7
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Ask them if the $995 'Admin fee' includes Lender's Title insurance, Title Exam and other fees under the Title Charges section. Typically they are not $0, so just make sure they don't mysteriously appear at the last moment.

As a side note, I'm usually against Owner's Title Insurance. Yeah yeah I know what it's supposed to do, and once in a while you hear stories, but imho it's still a waste of $$ unless you buy a very old house with a lot of history.
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      09-05-2012, 08:17 AM   #8
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As noted the Admin Fee seem high I never seen them that high and I would definitely find out what that includes. Other than that everything else looks in order, hell the title insurance is cheap. My closing costs were over 5K and title insurance was $3K in PA.

Title insurance is a joke they are make you take out insurance to protect them from them making sure the title is clean and clear when you buy the house and no one is going to come after you later for some unpaid bill by the previous owner.

Trust me if something is missed, the title insurance company will not be your friend they will try any way possible not to pay for the mistake.
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      09-05-2012, 08:25 AM   #9
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thanks for the responses I have a few more questions. what is up with the escrow acc.? Is it mandatory for first time home buyers? can I opt out of it with a larger down payment?
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      09-05-2012, 08:28 AM   #10
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Quote:
Originally Posted by MP0WER View Post
Low interest rate, high fees. Low fees, higher interest rates.
This. It's called "points". The more points you pay upfront, the lower your rate. Sometimes they're sneaky and say you're paying zero points, but work the extra money into some other administrative fee.

It can work the other way, too. A few years ago I refinanced a $300k house that I owed $228 on. I got 5.125%, and my closing costs were....ZERO. Negative points- I got a worse rate than I otherwise would've but I was saving money 2 months later (the time it took to pay for some odds and ends like the appraisal)
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      09-05-2012, 08:58 AM   #11
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Costs seem ok and remember these are just estimates at this point and subject to change. You won't have final closing costs until 24-48 hours prior to closing. Escrows are typically required if putting less than 20% down. If you're putting more than 20% down and escrowing you'll benefit from a slightly better rate versus waiving escrows.
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      09-05-2012, 09:24 AM   #12
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Quote:
Originally Posted by kevinbahnz View Post
thanks for the responses I have a few more questions. what is up with the escrow acc.? Is it mandatory for first time home buyers? can I opt out of it with a larger down payment?
Dunno what the requirements are and if not having an escrow really affects %, but for the first time buyer I'd recommend to have it.

Not having an escrow gives you a bit more flexibility with your $$, but also requires discipline to save and pay ins.and taxes, typically once-twice a year. It also gives you a bit of more control - I had a situation when my bank overpaid for insurance by mistake.
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      09-05-2012, 02:39 PM   #13
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I was looking for a loan for a rental. Loan amount under 30k after %20 down. Closin cost were all over 3k. Only a few banks would touch a loan like that. I Ended up
Passing because I couldn't bring myself to pay those fees. This was earlier this year.
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      09-05-2012, 02:47 PM   #14
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Back in the day if you did not put down 20% they required an escrow account for those recurring fees like taxes. They did this since banks never wanted to be second in line behind the government if they wanted to foreclose on your property.

In all situations when money is owed the government gets theirs first and they can only sell the property of what is owed on it to them. This what you hear about people buys an otherwise expensive home for a few thousand $.

Today, most all banks are requiring an escrow account even if you have 20% down or equality in the house. If you do not do this then they charge you a much higher interest rate. Some may not even issue a loan without an escrow. Last year I refi my house and have well over 20% equality and asked to waive the escrow account and they would not do it, they would not even cut the loan unless it have the escrow requirement. I just did a home equality loans and they too would not issue the loan without knowing I have an tax escrow account.

Banks are getting pretty strict about these since the really do not want to loose the property to the government for back taxes.
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      09-05-2012, 02:48 PM   #15
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Other then the $995 admin fee everything looks on point.
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      09-05-2012, 02:50 PM   #16
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Well, I remember when my friend wanted a $35k loan and they were asking $2k closing costs... he said they can forget about it

He did say the banker mentioned that a 35k loan or a 300k loan would've pretty much been the same cost... so I guess 3k for 120k isn't so bad?

I personally wouldn't do it though. You're paying 2-3% of the loan amount just in closing costs.
But each situation and case is different.

Did you consider getting an equity line of credit? (would only work if you already own it or own a good amount of it and it actually has equity)
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      09-05-2012, 04:57 PM   #17
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Typically closing costs only occur when one is putting a down a small chunk of $$.

Over on my side of the border, closing costs are 1.5% of the purchase price and is added in with your down payment amount if you are only putting in 5-10% down.
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      09-05-2012, 09:16 PM   #18
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it might vary from state to state, but it sounds about right.
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