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6k in estimated closing costs for 71k conventional loan. Am I getting ripped off here?

3,305 538 October 21, 2017 at 11:09 PM
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I have a credit union I was pre-approved for with a 3.85% fixed rate for 15 year conventional mortgage loan. The condo I am looking to purchase is 89k and I'm putting 20% down payment. My lender sent me a document giving me estimated closing cost and it's at about 6k. Does anyone else think I'm getting ripped off here or is this somewhat typical rates for closing / prepaid estimates? I'm based out of Florida.

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#2
Depends on what is included in the closing costs they are calculating and whether you have points on the mortgage or not? You likely have to pay for an appraisal, title search and insurance, any taxes\condo fees the current owner has already paid for the period after your closing date, home inspection, attorney costs, filing fees, etc. The title company doing the leg work should send you a breakdown of the fees.
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#3
Sounds like a rip to me
mine was less than 2k for 50k
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bulb save money by checking your insurance every 2 years (and not every 20) Thanks Liberty Mutual for reminding me to shop. The $842 increase this year sums it up. Across the board increase for Ohio....whatever
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#4
You said you got a GFE? Look at where the costs are. What are the fees and what are they for?
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#5
That is way to much for closing cost is their something else in the paper work that is adding 6k. I remember when I was closing cost in my home it was around $1k and I took all the closing cost fees. I feel their something else OP doesnt sound about right on it.
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just being slick
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#6
any good website to check the estimates for closing costs
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#7
Quote :
Quote from executivedealer
:
I have a credit union I was pre-approved for with a 3.85% fixed rate for 15 year conventional mortgage loan. The condo I am looking to purchase is 89k and I'm putting 20% down payment. My lender sent me a document giving me estimated closing cost and it's at about 6k. Does anyone else think I'm getting ripped off here or is this somewhat typical rates for closing / prepaid estimates? I'm based out of Florida.
executivedealerI have a credit union I was pre-approved for with a 3.85% fixed rate for 15 year conventional mortgage loan. The condo I am looking to purchase is 89k and I'm putting 20% down payment. My lender sent me a document giving me estimated closing cost and it's at about 6k. Does anyone else think I'm getting ripped off here or is this somewhat typical rates for closing / prepaid estimates? I'm based out of Florida.
My immediate guess would be that you are buying points to get the loan rate down. Unless you have top credit, a 3.85% is not offered to you without buying discount points at origination.
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#8
It sounds like you are looking at a Loan Estimate that is also including prepaid expenses (i.e. escrows), but if you go to page 2 you will see the itemization and be able to determine what are the actual costs and then compare whether the fee$ are out of line.
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#9
It's your property tax and home owners insurance escrow, that's why its so high, it's already end of the year so they're going to have to pay those in full for 2018.
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#10
Quote from eekthecat
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My immediate guess would be that you are buying points to get the loan rate down. Unless you have top credit, a 3.85% is not offered to you without buying discount points at origination.
On a 15? That's a very reasonable rate for someone with good credit right now. Points was my first thought too, and then prepaid escrow, but the rate doesn't seem particularly low to me.

I'll echo others, though, that we don't have enough information to answer. The GFE statements exist for a reason. Look through it, then figure out what makes up the $6k in closing costs. They have to tell you what you're being charged for, so it can't be just a line item that says "closing costs."
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#11
Quote from dukeblue219
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On a 15? That's a very reasonable rate for someone with good credit right now. Points was my first thought too, and then prepaid escrow, but the rate doesn't seem particularly low to me.

I'll echo others, though, that we don't have enough information to answer. The GFE statements exist for a reason. Look through it, then figure out what makes up the $6k in closing costs. They have to tell you what you're being charged for, so it can't be just a line item that says "closing costs."
Not sure what you mean by the rate -- I think you might be a bit confused on my post. I was saying, I thought clearly, that one way to get that kind of cost is to add origination points. The thought process is that the OP may not have amazing credit and the interest rate is a statement of risk. Not everyone gets the lowest rate. So someone with average or lower credit would be offered maybe 6% or whatever their risk vector is. Some originators offer points to drop that rate down to get money up front (origination points) which would be one very common way to get a high closing cost situation. The GFE would contain all of this information but I was pointing out a line item that is a likely culprit for extra charges. In the case of the OP, you would have to decide to pay up front for points or pay higher rates over time if your credit is not up to snuff for the best rates. This is just one scenario. There could be lots of expenses tied up in the front (taxes, insurance). That information would come from how the lender does servicing on the loan. So if they service the loan or require mandatory servicing ask them about it to learn more.

Hopefully that helps.
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