Posted on: 23rd Mar, 2007 08:53 pm
I have been working with a lender to get a guarunteed USDA rural development loan. Well, she has left a LOT to be deisred in the way of customer service. She took 6weeks to process our application. I called her everyday and she would always say just a little longer. Come to find out in the end, she had never even submitted half of our documents to her underwriter(he contacted us directly for them weeks after she had them). Then it took another week to get a prequal letter and yet another week to get a good faith estimate. All in all, it has been 2 months of headaches. This is the only loan that we have been able to qualify for due to bad/lack of credit. So, we found a house. hd an accepted offer, and we finally ot our good faith estimate which lists closing costs at $6,500 on a $128,000 loan @ 6.5% and no discount points. There is also an additional $2500 guarntee fee. This seems to be awfully excessive. Does anyone have an ides if this is normal for rural development loans. I can't trust a word out of my lenders mouth, so I can't ask her. Is there any way to get these costs down? I don't think that we can afford them and I am sure that our wily lender will throw more even more costs at us at closing. Thanks in advance for any advice!!!
Welcome Thaddeus,
It seems that the closing costs are quite high because in general rural development loans are available at minimal closing costs.
You can either request the lender to finance a part of your closing costs but then he may charge you higher interest rate. By the way, didn't you compare the costs with other lenders in the market. That would have helped you get a loan with reasonable costs.
It seems that the closing costs are quite high because in general rural development loans are available at minimal closing costs.
You can either request the lender to finance a part of your closing costs but then he may charge you higher interest rate. By the way, didn't you compare the costs with other lenders in the market. That would have helped you get a loan with reasonable costs.
"and we finally ot our good faith estimate which lists closing costs at $6,500 on a $128,000 loan @ 6.5% and no discount points. There is also an additional $2500 guarntee fee. This seems to be awfully excessive."
Usually a 2% guarantee fee is common on such loans (which is what you are being charged). Is there a possibility that the closing cost may be included in the loan? (the requirement is that appraised value of the house is higher than sales price)
Usually a 2% guarantee fee is common on such loans (which is what you are being charged). Is there a possibility that the closing cost may be included in the loan? (the requirement is that appraised value of the house is higher than sales price)
Hi ted!
Welcome to forums!
Closing cost can be included in the loan. However, it would be the lender's discretion whether or not he would include the closing costs in the loan. You will have to speak to your lender and check out if he can give you such a loan.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Closing cost can be included in the loan. However, it would be the lender's discretion whether or not he would include the closing costs in the loan. You will have to speak to your lender and check out if he can give you such a loan.
Feel free to ask if you've further queries.
Sussane
I'd say that if the closing costs are excessive, the lender may not want to include them in the loan amount if it pushes the total borrowings too high, other than that I can't see why they'd have a problem, though %equity is more of a problem now than in recent years