Posted on: 19th Jun, 2009 04:19 pm
Hi new here! First Time Home Buyer Needing some advice.
Purchasing family home for 180000 with 18000 gift of equity down payment plus seller 10000 for closing cost.
The loan amount is 162000. My closing costs from GFE is 14,300!!!! Is this right or are they taking advantage of me "free" money from the gift of equity????
How long do i have to change my mind or back out?? I am being charged 2 points(1 for Orig fee and 1 for disct fee), 1600 application fee, 1600 title insurance fee, 2800 Mortgage Insurance Premium, prepaid interest 30 days @25.9672 for $800 and some smaller fees. Does this seem normal??
My credit score is 620-640 and i do pay bills on time, credit to debt ratio is a little high, i gross 45,000/yr but previous job i had 18months ago i was making only 30/yr. Using a Broker who is a relative of friend.
Any advice or info would be greatly appreciated!!!
Purchasing family home for 180000 with 18000 gift of equity down payment plus seller 10000 for closing cost.
The loan amount is 162000. My closing costs from GFE is 14,300!!!! Is this right or are they taking advantage of me "free" money from the gift of equity????
How long do i have to change my mind or back out?? I am being charged 2 points(1 for Orig fee and 1 for disct fee), 1600 application fee, 1600 title insurance fee, 2800 Mortgage Insurance Premium, prepaid interest 30 days @25.9672 for $800 and some smaller fees. Does this seem normal??
My credit score is 620-640 and i do pay bills on time, credit to debt ratio is a little high, i gross 45,000/yr but previous job i had 18months ago i was making only 30/yr. Using a Broker who is a relative of friend.
Any advice or info would be greatly appreciated!!!
origination and discount seem to be fine. (3420 - to your broker)
2800 for mortgage insurance premuim is charged by HUD on FHA. It is not a matter of choice on this fee.
prepaid interest is money that will go to the new mortgage company. The amount of days charged varies on the day of the month you close. This is to prevent the lender from sending you a partial bill because you start paying the day you close. Then you are always paying interest after you have been charged. Ex : your August payment would be all of the interest that you owe for all of the days in July. That is why you will have a month and whatever partial month that is left before you make your first payment. It is not becuase the mortgage company is nice. :)
Application fee seems high but may not go to your freind it may be money off the top that his office collects.
Title is normally a separate company and it seems high, but I am sure where you are located. Fees vary across the country.
Other fees could be junk fees but again I cant be certain.
I would say that a typical lender is going to try to make 2-3 points (1 origination, 1discount) The other point could be on the interest rate they are giving you. You may want to make sure you know what they are making off the rate they offered you.
If your friend is only paid off the 3240. Then its a good deal. If they are making that plus the 1600, then we are still ok. If they are making all of that plus making another 1% off the interest rate or more then they are making real good money. IF it is the last case they are making a fee of around $6500, which is over 4%. My state has a max of 5%. I am not sure about your state.
Now of that possible $6500.00 they will typically get a commisision split. They may only end up with 30% on up. So how much they are making may not be as bad as $6500 seems. Regardless it is still costing you.
All in all not necessarily a bad deal other than questionable $800.00 and $1600 in title. Just not sure about those other details that are unknowns.
2800 for mortgage insurance premuim is charged by HUD on FHA. It is not a matter of choice on this fee.
prepaid interest is money that will go to the new mortgage company. The amount of days charged varies on the day of the month you close. This is to prevent the lender from sending you a partial bill because you start paying the day you close. Then you are always paying interest after you have been charged. Ex : your August payment would be all of the interest that you owe for all of the days in July. That is why you will have a month and whatever partial month that is left before you make your first payment. It is not becuase the mortgage company is nice. :)
Application fee seems high but may not go to your freind it may be money off the top that his office collects.
Title is normally a separate company and it seems high, but I am sure where you are located. Fees vary across the country.
Other fees could be junk fees but again I cant be certain.
I would say that a typical lender is going to try to make 2-3 points (1 origination, 1discount) The other point could be on the interest rate they are giving you. You may want to make sure you know what they are making off the rate they offered you.
If your friend is only paid off the 3240. Then its a good deal. If they are making that plus the 1600, then we are still ok. If they are making all of that plus making another 1% off the interest rate or more then they are making real good money. IF it is the last case they are making a fee of around $6500, which is over 4%. My state has a max of 5%. I am not sure about your state.
Now of that possible $6500.00 they will typically get a commisision split. They may only end up with 30% on up. So how much they are making may not be as bad as $6500 seems. Regardless it is still costing you.
All in all not necessarily a bad deal other than questionable $800.00 and $1600 in title. Just not sure about those other details that are unknowns.
that application fee is atrocious, unless it encompasses credit report, processing, underwriting, appraisal and other fees. if those things are separately charged, then you're paying too much.
