Is it normal for NQM lenders to charge 8% closing costs?

[Account Closed]

Is it normal for NQM lenders to charge 8% closing costs for purchasing investment residential 2-4 SFHs?

[Stephanie P.]

Quote from @Eliott Elias:

It's getting kind of crazy. I was charged $8k on a 112k DSCR refi.

If the broker charges 2 points. That would be $2240. They may charge a processing fee of $450 (that's low, but...).  The lender will charge anywhere from $999 and a point to $1995 at par for underwriting depending on the lender.  Which lender usually depends on your particular circumstance.  Using the more expensive option, you're at $4809 in lender/broker charges.  If your taxes are $2500 per year and insurance is $1500, that's another $4000 for escrows before the title company and prepaids, so I can see $8,000 on a $112,000 loan.

On a conventional loan, you may not pay points because they're built into the lender paid comp, but your underwriting fee will be around $1250.  Add that to the $4000 in taxes and insurance and then title charges and you may be close to $8000.

Closing costs aren't that much more now than they were 3 years ago; in some cases, they're less.