Posted on: 14th Feb, 2007 12:39 pm
I wanted to know about the numbers that are listed beside the estimates in a gfe, like 801 - origination fee and the rest..
Hi Peter,
The numbers you see besides the estimates correspond to the numbered lines in a HUD-1 or HUD-1A settlement statement which you will receive at settlement.
David
The numbers you see besides the estimates correspond to the numbered lines in a HUD-1 or HUD-1A settlement statement which you will receive at settlement.
David
thanks david, when a HUD-1A statement is used?
hi peter,
it is used at the time of refinance and also for any other transaction which does not involve transfer of property title. but it cannot be used as a substitute for hud-1 settlement statement where there is a transfer of title and a first mortgage is involved.
it is used at the time of refinance and also for any other transaction which does not involve transfer of property title. but it cannot be used as a substitute for hud-1 settlement statement where there is a transfer of title and a first mortgage is involved.
peter,
another thing to be aware of is that the numbers, while simply line items, are divided into "series".
The 800s or 800 series are all fees set and/or paid to the mortgage lender. With the exception of the apprasial fee, credit report fee, and the tax service fee, these charges are all charged by the lender and paid to the lender or mortgage broker.
the 900 & 1000 series is your pre-paid items. If you have an escrow account with your loan, this section will show the collection of money for setting up the reserve balance in that account. It also shows the pre-paid interest for the days remaining in the month you close. (close on the 20th of the month and you owe 10 or 11 days interest depending on if there are 30 or 31 days in the month).
The 1100 series and 1200 series are fees associated with the title company, real estate attorney, county, etc. These fees while estimated by your loan officer on the good faith estimate are beyond the lender's control in most cases. It's a mistake to comparison shop lenders using these fees as inexperienced loan officers will grossly underestimate these costs just to give you a better-looking bottom line total cost.
The 1300 series is where you find the home warranty, property survey and other misc. items.
always compare lenders based on the total of the 800 series of costs. While lenders/loan officers must estimate ALL FEES, only the 800 series is controlled by them. If you have two lenders give you a good faith estimate and lender 1 has $2,000 in fees in the 800 series and $5,000 total closing costs while lender 2 has $3,200 in fees in the 800 series and $4,200 in total closing costs....which is the cheaper lender?
If you go off of the total you are making a mistake in most cases. The 900, 1000, 1100, 1200, & 1300 series fees will be nearly the same when you get to final closing depending on your purchase contract, homeowner's insurance company, county taxes...etc. All items NOT controlled by the lender.
The correct answer is probably lender #1.
another thing to be aware of is that the numbers, while simply line items, are divided into "series".
The 800s or 800 series are all fees set and/or paid to the mortgage lender. With the exception of the apprasial fee, credit report fee, and the tax service fee, these charges are all charged by the lender and paid to the lender or mortgage broker.
the 900 & 1000 series is your pre-paid items. If you have an escrow account with your loan, this section will show the collection of money for setting up the reserve balance in that account. It also shows the pre-paid interest for the days remaining in the month you close. (close on the 20th of the month and you owe 10 or 11 days interest depending on if there are 30 or 31 days in the month).
The 1100 series and 1200 series are fees associated with the title company, real estate attorney, county, etc. These fees while estimated by your loan officer on the good faith estimate are beyond the lender's control in most cases. It's a mistake to comparison shop lenders using these fees as inexperienced loan officers will grossly underestimate these costs just to give you a better-looking bottom line total cost.
The 1300 series is where you find the home warranty, property survey and other misc. items.
always compare lenders based on the total of the 800 series of costs. While lenders/loan officers must estimate ALL FEES, only the 800 series is controlled by them. If you have two lenders give you a good faith estimate and lender 1 has $2,000 in fees in the 800 series and $5,000 total closing costs while lender 2 has $3,200 in fees in the 800 series and $4,200 in total closing costs....which is the cheaper lender?
If you go off of the total you are making a mistake in most cases. The 900, 1000, 1100, 1200, & 1300 series fees will be nearly the same when you get to final closing depending on your purchase contract, homeowner's insurance company, county taxes...etc. All items NOT controlled by the lender.
The correct answer is probably lender #1.
