$9k for closing costs??? Lender / Broker Questions

22 Replies

So I'm going through escrow right now and realized I'm pretty sure I'm overpaying for the closing costs. I'm being charged $9,071 and through research, it says that it's usually $3.5-7.5k. The house was $90k. Is this too high for closing costs? Should I try to go through another lender? Would it make a difference? How much of a difference does a broker make for a conventional loan in the sense of decreasing interest rate and costs?

seems high from JUST closing cost perspective on buyer or seller side (escrow+attorney+survey+prorated tax+ doc)... but again it could be very low depending on how the closing cost is being constructed (may be point or cost from both side etc) ..

if you can give a breakout /pic of the closing statement then i can help 

@Account Closed Did you even read through the costs line by line ... the lender is only charging 0.5% in points ($437). Most of the rest is title costs and your other costs. Transfer taxes are the biggest at $2250. I usually don't see 12 month of property tax in escrow but that's the only place I see that you can save money upfront (the money in escrow is still your money). Why are you paying $300 in additional brokerage? The broker should be getting paid by the seller. Also, what is the final inspection fee? What did they inspect?

At this point even if you go to a different lender, you will have to do a new appraisal and end up spending even more as most of the items listed will be there by other lenders as well. 

I paying 7500 on a 78k property.  2500 of which is a loan level pricing adjustment which is something dictated by fannie mae.  I want to know how you getting a loan with only 2700 down payment on a 90k property, thats only 3%.  Are you living in this property?  

I'm buying a $90k home with cash Fri. My closing costs are $471.20 exactly.

I was amazed when I got the final figure as well.  Because yours is also $90, thought I would share.

To be fair, I always add RO to the end of the BRRRR strategy everyone seems to love or anything that involves a mortgage. The RO is for Rip Off fees. Most never see them coming. Good luck out there.

Looks like @Avi Garg broke it down well. 

The lender I use charges a flat 750 dollar origination/underwriting fee, so i guess you could technically get it a little cheaper.... but like Avi said, most of those charges aren't even coming from the lender. 

You're getting reamed with junk fees in section C. The transfer tax is probably not calculated in what you're seeing other people quote. I know that they don't exist in AZ.

I see in section C that those are expenses I can shop for. Are there any suggestions on how I can go about finding better prices for this?
There were 15 offers on the house. I was tied with highest bid and waived an inspection so they chose my bid. I did, however, get the house inspected and there’s nothing wrong with it. This is my first house I bought and will be living in one room renting out the other 3 rooms which is why the down payment is so low.

Stay with the deal or jeopardize losing the property (whatever makes most sense In your situation). I don't think they would want to put up with you re-applying with another lender, especially when they had 15 offers.

Maybe the transfer tax is normal but even if it is that’s still 7.5k. That’s a rip off. My closings got similarly priced properties are 3.5-5k.

Typically you’ll get a Final CD (closing disclosure) and that’ll outline the exact fees. Typically when I compare this to the initial estimate the estimate was high, but usually not by much (5-800 bucks).

@Account Closed I am closing in two weeks on a property that costs $197K and my closing costs are $2169.75 plus prepaid costs of $2200. The prepaid costs are property taxes and insurance. So my total is around $4400 compared to your $9K and my property costs twice as much.

Some differences on mine:

- No inspection fee which is $650 of your cost (I waived inspection to make my offer more appealing)

- No origination fee and yours is $437 (my rate is no points, 5.25% for investment, 30YR)

- No recording fees or transfer taxes, which is over $3000 for you

- My underwriting fee is $450 and yours is $711

- My document prep fee is $120 and looks like your processing fee is $534

- Title insurance for me is $444 and yours is over $900

- I don't pay any realtor fees as the buyer, you are paying $300

It looks like you are paying the "I am new so you can screw me tax". Welcome to the world of real estate. Don't leave your pocket open or someone will put their hand in it. Always get two quotes and compare line items side by side. 

@Nathan Mellor regional bank, First Bank and Trust. I don't think I am getting any special treatment. Part of it could be generally lower cost of doing business in my state. 

Originally posted by @Steve Vaughan :

I'm buying a $90k home with cash Fri. My closing costs are $471.20 exactly.

I was amazed when I got the final figure as well.  Because yours is also $90, thought I would share.

To be fair, I always add RO to the end of the BRRRR strategy everyone seems to love or anything that involves a mortgage. The RO is for Rip Off fees. Most never see them coming. Good luck out there.

When I bought my first house paid in cash, my closing costs were also only a few hundred dollars. But that doesn't help the OP since the majority of closing costs are from a lender, they are much less when there is no lender due to a cash purchase.

OP, I've bought houses as much as 500K and never paid more than 6-7K from what I remember. Your CC seems like a HUGE ripoff to me.

As I said, Jack, I only commented because our PPs were the same and it was a coincidence that I happen to be closing tomorrow.

Also I was shocked at how much less the closing costs are with cash. Only 1/2 escrow fee at $471. I was ready for the $4000 barrell like usual.

It's not talked about enough- borrowing costs. Everyone just talks about leveraging and BRRRR constantly. Hey, it costs 10s of thousands doing a bunch of refi's.

Ok, I've never obtained a mortgage this small but did do a cash out refi on a rental house last fall for $112k, 15yr at 4.25%. Community bank lender, no broker. Borrowing costs were $2800, pre-paids and appraisal was $1600,   In WA it is customary for the seller to pay transfer (excise) taxes when we buy. They run about 1.7%.

@Steve Vaughan not to mention all the money you typically keep in escrow...the down payment for me is no issue. It’s the closing costs and escrow that I’m slowly becoming aware of as far as painful lol.

Just another reason to eventually just buy all cash and NOT refinance. I know shocking on this website.

I’m about 3 years away from doing that when the girlfriend finishes school. Take two people in their mid 20s at that time, no dependents and W2 incomes just below 180k and that’ll buy you a lot of 50k houses lol. Not to mention the cash flow I’ll have from my own 8-10 rentals have by then.