$8000 closing costs for cash-out refi of a rental property in Cincinnati

[Haiyang A.]

I am looking to do a cash-out refinance for a rental property which is located in the Cincinnati area. The quote I'm getting from a local mortgage broker is as follows: 30 year fixed conventional financing, 75% LTV, 7.5% rate with $8015 closing costs. I know that the Fed has increased the rate dramatically over the past year and half, but the closing cost, in my opinion, is really a bit beyond my expectation. I know the mortgage broker will need to make a living and the situation right now is not particularly conducive for doing business, but is it what is considered "normal" in this environment?

P.S. The closing costs he's giving me keep going up for the past 10 days. I looked at the quote he gave back in 8/25, it was at $4500 with 7.875%.

[Chris Watkins]

Closing costs can include points used to buy down the rate as well as pre-paids which can vary wildly depending on time of month/year, so that may speak to the difference there. A blanket number like that isn't helpful to evaluate. We'd need to see a detailed breakdown or Lending Estimate to really suss out any inconsistencies. Typical closing costs are 2-3% of the purchase price or loan amount, depending on the specifics of the transaction. Hard to say, but I doubt your broker is being dishonest or gouging you anywhere.