Posted on: 21st Nov, 2009 05:54 pm
First time homebuyer here. I am applying for a loan and upon reviewing the GFE noted that the 801 Origination fee is 2% of the loan. I did some research and noticed that this fee is unusually high for someone with my excellent credit history and extremely low debt to income ratio.
I asked my seller why the fee was so high. She stated that my interest rate was brought down, and that cost half a point. She then went on to say that she wasn't charging me for that point. It is for that reason why the fee is high.
She locked my interest rate on 11/5/09 at 5% and the paperwork explicitly stated that there were no discount fees or points applied for this rate.
Can I make the case that the 0.5 points that she "paid for" should either be refunded or actually used to lower my interest rate? Are her actions legal/ethical?
I have not closed on the house yet.
I asked my seller why the fee was so high. She stated that my interest rate was brought down, and that cost half a point. She then went on to say that she wasn't charging me for that point. It is for that reason why the fee is high.
She locked my interest rate on 11/5/09 at 5% and the paperwork explicitly stated that there were no discount fees or points applied for this rate.
Can I make the case that the 0.5 points that she "paid for" should either be refunded or actually used to lower my interest rate? Are her actions legal/ethical?
I have not closed on the house yet.
You COULD walk away from that lender if you still have time. When is your closing? Get another rate quote.
Thanks for responding so quickly. The closing date could happen any day but there is a possibility that it will be delayed by as much as four weeks because the seller wants to stay a month longer. I haven't decided if I am going to allow that yet.
If I get another rate quote could I use that as a means to argue for lower fees?
Is it legal for the lender to say that she is not charging me for points and that is why the origination fee is so high? I think that 5% is par so there shouldn't be any points involved.
If I get another rate quote could I use that as a means to argue for lower fees?
Is it legal for the lender to say that she is not charging me for points and that is why the origination fee is so high? I think that 5% is par so there shouldn't be any points involved.
The GFE is one of the first things you should have received from your lender. I would tell the lender that you want the fees reduced or you will walk away. Did you pay anything yet? what state are you in?
Thanks Eric,
Another question if you don't mind:
I received the GFE in late October with a statement that the interest rates may change. My lender then locked my rate two weeks later. Even though the rates had gone down significantly my lender locked me in for the same rate as the GFE. Is this normal?
My home state is CA.
Another question if you don't mind:
I received the GFE in late October with a statement that the interest rates may change. My lender then locked my rate two weeks later. Even though the rates had gone down significantly my lender locked me in for the same rate as the GFE. Is this normal?
My home state is CA.
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>>Even though the rates had gone down significantly my lender locked me in for the same rate as the GFE. Is this normal?
No. You should receive the lower interest rate. If your Loan Officer locked in the higher rate, you need to fire that Loan Officer and hire somebody trustworthy.
No. You should receive the lower interest rate. If your Loan Officer locked in the higher rate, you need to fire that Loan Officer and hire somebody trustworthy.
