Closing cost too high for cashout Refinance Condo

Louisville, Kentucky
Buying & Selling Real Estate
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Closing cost too high for cashout Refinance Condo

Dipesh Jadav
Member since 2023 · 2 posts · 0 votes

Hey Guys,

I have a question, I own a property cash and I am looking to cash out refi, The property appraised at 205K and I am cashing out 100K , my closing costs are considerably high, 5.5K compared to closing costs I have endured when purchasing my home. more details from closing disclosure:

I am getting 6.75 % mortgage rate (not locked), Origination fee is $3758 ( 2.5% loan points - $2684, processing fee $699 and underwriting fee-: $375), Escrow payment at closing : $1076, Services can not shop for: $1180 and services you can shop for: $1062

I think I am paying too much on origination fee also I think closing cost should be 1-2% of the loan.  I am fairly new to real estate investing- this is my first home that I am trying to do that, 

Please help me, Any thoughts and opinion are appreciated.

 

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    2y

    6.75% interest rate seems to align with a traditional bank lender. Usually you will see a 1% origination fee. However, you will typically have a loan doc prep, appraisal, and a few other misc. expenses. Did you pay for the appraisal separately ahead of time? These other fees could be baked into your 2.5% loan points. Also could there have been a rate buy down built into origination fee? 

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  • Dipesh Jadav
    OP
    Member since 2023 · 2 posts · 0 votes
    2y

    Thank you Stuart for your reply. As I am doing cash out refi, lender told me that buy down doesn't apply.

    How can I lower my closing cost?

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Dipesh Jadav:

    Hey Guys,

    I have a question, I own a property cash and I am looking to cash out refi, The property appraised at 205K and I am cashing out 100K , my closing costs are considerably high, 5.5K compared to closing costs I have endured when purchasing my home. more details from closing disclosure:

    I am getting 6.75 % mortgage rate (not locked), Origination fee is $3758 ( 2.5% loan points - $2684, processing fee $699 and underwriting fee-: $375), Escrow payment at closing : $1076, Services can not shop for: $1180 and services you can shop for: $1062

    I think I am paying too much on origination fee also I think closing cost should be 1-2% of the loan.  I am fairly new to real estate investing- this is my first home that I am trying to do that, 

    Please help me, Any thoughts and opinion are appreciated.

     


    Are the loan points and the origination fee both separate charges? 

    If they are points, are they discount points for the rate? Is this for a primary residence or investment property? 

    On something like this you could expect. $3,000 Origination, $1395 UW, $699 Processing for a DSCR loan.

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