Lender Points too high?

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Lender Points too high?

Josiah Guyer
Member since 2021 · 9 posts · 3 votes

Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

Thanks

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
1y
Quote from @Josiah Guyer:

Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

Thanks

Hey @Josiah Guyer! I somewhat figured where you were going when you started by comparing the costs of an investment property loan to your "personal residence". You're comparing apples to oranges. 

Before anyone can say if the closing costs are "too high", can you say whether this investment property loan is with a bank/credit union or a hard/private money lender?

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  • Jaycee GreenePro Member
    Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks

    Hey @Josiah Guyer! I somewhat figured where you were going when you started by comparing the costs of an investment property loan to your "personal residence". You're comparing apples to oranges. 

    Before anyone can say if the closing costs are "too high", can you say whether this investment property loan is with a bank/credit union or a hard/private money lender?

    [email protected]
    4Reply
  • Josiah Guyer
    OP
    Member since 2021 · 9 posts · 3 votes
    1y

    @Jaycee Greene True my personal residence isn't purely an investment but it also is a duplex that I'm house hacking. I'm going through a brokerage. I think it is through a bank. 

    0Reply
  • Stephan L Schnaiter
    Lender · Greenville. SC · Member since 2018 · 25 posts · 9 votes
    1y

    I'm an MLO and I would suggest that the lender fees could be a bit high if you have a low DTI and great credit score for a conforming conventional loan product.

    If it is a DSCR loan or your credit score is average or not all of those are truly lender fees or (etc, etc, etc) than it might be ok. We need more info.

    If you're in South Carolina, where I'm a lender, I'd be happy to take a look. 

    0Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    By the fact that you're looking for info, you should shop your opportunity and the numbers from the deal to several lenders to see what consensus might actually be.

    3Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks


     Do you have a Loan Estimate to share and see what these fees are? $68,000 in fees for $161,250 Loan Amount is insanely high. I don't even think you would pass compliance on something like that. 

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1y
      Quote from @Erik Estrada:
      Quote from @Josiah Guyer:

      Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

      Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

      Thanks


       Do you have a Loan Estimate to share and see what these fees are? $68,000 in fees for $161,250 Loan Amount is insanely high. I don't even think you would pass compliance on something like that. 


      I think he is saying the fees are 7k  which to me would be fine.. maybe i am not understanding it correctly. 
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  • Katie Smith
    Member since 2023 · 348 posts · 190 votes
    1y

    Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

    0Reply
    • Jeff ChisumPro Member
      Lender · All 50 States · Member since 2020 · 248 posts · 142 votes
      1y
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.
      1Reply
    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.

      0Reply
    • Jeff ChisumPro Member
      Lender · All 50 States · Member since 2020 · 248 posts · 142 votes
      1y
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      0Reply
    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Jeff Chisum:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      You are mistaken.  We have several that are backed by the feds, and they are not allowed to be transferred without approval.  Non-small balance loans.

      0Reply
    • Patrick Roberts
      Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
      1y
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      You are mistaken.  We have several that are backed by the feds, and they are not allowed to be transferred without approval.  Non-small balance loans.


      Conventional loans allow properties to be transferred to an LLC after the loan has funded if certain requirements are met. The borrower must remain on the note and mortgage, but the Title can be transferred to an LLC, LP, or certain trusts so long as the majority owner/controller of the entity is the borrower. Conventional does not allow entities to be the borrower, so you cannot fund a new loan while the entity holds Title. That being said, I remember this only applying to loans made after 2016 or something like that.

      Govt loans (FHA, VA, USDA, loans that are modded/distressed where the govt has an interest) cannot.

      0Reply
    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Patrick Roberts:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      You are mistaken.  We have several that are backed by the feds, and they are not allowed to be transferred without approval.  Non-small balance loans.


      Conventional loans allow properties to be transferred to an LLC after the loan has funded if certain requirements are met. The borrower must remain on the note and mortgage, but the Title can be transferred to an LLC, LP, or certain trusts so long as the majority owner/controller of the entity is the borrower. Conventional does not allow entities to be the borrower, so you cannot fund a new loan while the entity holds Title. That being said, I remember this only applying to loans made after 2016 or something like that.

      Govt loans (FHA, VA, USDA, loans that are modded/distressed where the govt has an interest) cannot.


       Again, this depends on the loan.  But what do I know.  I've only been doing this 40+ years.

      0Reply
    • Jay HurstBusiness Member
      Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
      1y
      Quote from @Calvin Thomas:
      Quote from @Patrick Roberts:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      You are mistaken.  We have several that are backed by the feds, and they are not allowed to be transferred without approval.  Non-small balance loans.


      Conventional loans allow properties to be transferred to an LLC after the loan has funded if certain requirements are met. The borrower must remain on the note and mortgage, but the Title can be transferred to an LLC, LP, or certain trusts so long as the majority owner/controller of the entity is the borrower. Conventional does not allow entities to be the borrower, so you cannot fund a new loan while the entity holds Title. That being said, I remember this only applying to loans made after 2016 or something like that.

      Govt loans (FHA, VA, USDA, loans that are modded/distressed where the govt has an interest) cannot.


       Again, this depends on the loan.  But what do I know.  I've only been doing this 40+ years.


      https://servicing-guide.fanniemae.com/svc/d1-4.1-02/allowabl...

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    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Jay Hurst:
      Quote from @Calvin Thomas:
      Quote from @Patrick Roberts:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Calvin Thomas:
      Quote from @Jeff Chisum:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      You can do a conventional loan and transfer to an LLC after closing on an investment property.

       Only if the lender allows this, if not, it can trigger a due on sale clause.


       If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

      You are mistaken.  We have several that are backed by the feds, and they are not allowed to be transferred without approval.  Non-small balance loans.


      Conventional loans allow properties to be transferred to an LLC after the loan has funded if certain requirements are met. The borrower must remain on the note and mortgage, but the Title can be transferred to an LLC, LP, or certain trusts so long as the majority owner/controller of the entity is the borrower. Conventional does not allow entities to be the borrower, so you cannot fund a new loan while the entity holds Title. That being said, I remember this only applying to loans made after 2016 or something like that.

      Govt loans (FHA, VA, USDA, loans that are modded/distressed where the govt has an interest) cannot.


       Again, this depends on the loan.  But what do I know.  I've only been doing this 40+ years.


      https://servicing-guide.fanniemae.com/svc/d1-4.1-02/allowabl...


      Depends on the loan.
      0Reply
    • Tom Amon
      Member since 2025 · 13 posts · 6 votes
      1y
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      Aside from the protection, does that change any part of the cost of the loan? Are you saying that it would be a non-conventional loan by putting it through an LLC? If you could help me understand, I am in the process of figuring out the best way to structure all of this.

      We have excellent credit and we have the cash. We are trying to understand the best way to structure the purchase of an investment property, get the lowest interest rate, and the lowest cost of the loan, due to the fact that we would put 25% down. We have close to 800 credit scores.

      0Reply
    • Patrick Roberts
      Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
      1y
      Quote from @Tom Amon:
      Quote from @Katie Smith:

      Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

      Aside from the protection, does that change any part of the cost of the loan? Are you saying that it would be a non-conventional loan by putting it through an LLC? If you could help me understand, I am in the process of figuring out the best way to structure all of this.

      We have excellent credit and we have the cash. We are trying to understand the best way to structure the purchase of an investment property, get the lowest interest rate, and the lowest cost of the loan, due to the fact that we would put 25% down. We have close to 800 credit scores.


      You cannot get a conforming loan (meaning Fannie or Freddie) with the property owned by an entity. Those loans are only available to individual persons and certain types of trusts. To get a loan with an entity, such as an LLC, holding title and/or being the borrower, then you will need to use a commercial loan, such as a DSCR loan.

      Conforming loans will almost always be the best bang for the buck, but you will have to go through a traditional mortgage underwrite - income, credit, employment, DTI, etc. Typically, conforming loans will have approx the same rates as DSCR loans but without some of the points and prepay penalties. You can also transfer title of a property to an LLC once you have a conforming loan on the property, but I have my doubts about whether this truly accomplishes anything.

      Whether or not you need an entity for liability protection is specific to your circumstances, and only an attorney who has been retained to represent your interests can advise you on this. LLCs are not a magic wand that make you lawsuit proof - there are a lot of technicalities and variables that affect this. It also varies by state. Limited-liability entities may be necessary in some circumstances and not in others - in many cases, an umbrella insurance policy is more than sufficient. 

      1Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks

    Seems a bit high, usually its safe to assume that closing costs on investment loans are in the range of 4-5% of the loan amount. This leads me to believe your quote are north of that target. I would get a loan estimate from the lender and shop with another competitive person who can help you shave cost where its needed.
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  • Brandon Croucier
    Lender · Nashville, TN · Member since 2024 · 700 posts · 284 votes
    1y

    $7,000 in fees is relatively moderate. 

    Most lenders have fixed fees alone of $3,000-$3,500.

    Then you have origination fees of 1-3%.

    In this case it seems they have fixed fees of about $3,500 with 2% origination.

    For a loan of this size this is fair, it takes a lot of work to get a loan funded & you cannot expect someone to work for pennies.

    3Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks


     that seems high, I would think you would be around $3000 in lender points and what are the fees they charging you?

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  • Calvin Thomas
    Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks


    That's crazy.  Find a new lender.  What's your DTI and FICO?
    0Reply
    • Josiah Guyer
      OP
      Member since 2021 · 9 posts · 3 votes
      1y
      Quote from @Calvin Thomas:
      Quote from @Josiah Guyer:

      Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

      Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

      Thanks


      That's crazy.  Find a new lender.  What's your DTI and FICO?

       FICO is 767 not sure what my dti is. 

      0Reply
    • Calvin Thomas
      Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
      1y
      Quote from @Josiah Guyer:
      Quote from @Calvin Thomas:
      Quote from @Josiah Guyer:

      Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

      Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

      Thanks


      That's crazy.  Find a new lender.  What's your DTI and FICO?

       FICO is 767 not sure what my dti is. 


      To calculate your debt-to-income (DTI) ratio, add up all your monthly debt payments and divide that total by your gross monthly income (income before taxes). Multiply the result by 100 to express it as a percentage. You should request what they consider your DTI ratio is. It could be incorrect.

      1Reply
  • Jeff ChisumPro Member
    Lender · All 50 States · Member since 2020 · 248 posts · 142 votes
    1y

    DSCR loans are typically the best option overall in todays environment; lower rate, down payment requirement, closing cost

    0Reply
  • Ying Tang
    Member since 2025 · 316 posts · 119 votes
    1y

    I just bought a duplex too. My rates and fees are much lower. I'd be happy to share. Just DM me. I have nothing to sell.

    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks

     @Josiah Guyer   You are paying "discount" points to get to the 7.125% rate. The discount points are essentially paying for the loan level pricing adjustments (LLPA) on your loan. The exact LLPA on your deal would depend on your credit score, but just assuming a 740 the LLPA's on a non-owner occupied 2 unit property with 25% down with 740 credit score would be .375% for purchase at 740, 2.125% for  investment property and .375% for a 2 unit.  So, that is 2.875% LLPA.  Here is the matrix:  https://singlefamily.fanniemae.com/media/9391/display

    so, your rate and costs in your scenario are always going to sound high relative to an owner occupied property because of the LLPA's.  But, that all being said 14k in costs do seem quite high (assuming good credit anyway).   You should shop around understanding that rates and costs ARE related.  You can always pay less up front in return for less costs etc. 

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    1y

    You’re making a common mistake, @Josiah Guyer. You are not paying $68k in fees. The $54k down payment is not a fee; it goes toward the purchase of your house and becomes equity when you close. It’s still your money.

    You appear to be borrowing $161k ($215k – $54k). The remaining $14k for closing costs, points, and fees are expenses. Your points and fees are $7k/$161k, or 4.3%. This could be high but does not seem excessive. Similarly, $7k for closing costs sounds a bit high, but not extraordinary. Of course, this could be regional.

    You need to shop around a bit instead of jumping to the last lender who financed your personal residence. Ask them to explain their charges individually so you can make relevant comparisons and avoid the wrong assumptions.

    2Reply
    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1y
      Quote from @Jeff S.:

      You’re making a common mistake, @Josiah Guyer. You are not paying $68k in fees. The $54k down payment is not a fee; it goes toward the purchase of your house and becomes equity when you close. It’s still your money.

      You appear to be borrowing $161k ($215k – $54k). The remaining $14k for closing costs, points, and fees are expenses. Your points and fees are $7k/$161k, or 4.3%. This could be high but does not seem excessive. Similarly, $7k for closing costs sounds a bit high, but not extraordinary. Of course, this could be regional.

      You need to shop around a bit instead of jumping to the last lender who financed your personal residence. Ask them to explain their charges individually so you can make relevant comparisons and avoid the wrong assumptions.


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  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    Sounds like this is Conventional. Your FICO will have a major impact on the pricing (points for the rate). 

    Lender fees (underwriting, processing, credit report stuff, appraisal) should be between $2k and $3k. Depending on the lender type, some of these fees could be in either box a or box b on the LE. Attorney/Title fees are around $2k in my state, but this varies heavily by state. Prepaid interest could easily be another $750-$1,000, depending on which day of the month you're closing. 

    I wouldnt expect more than 2 points on a Conventional investment loan. 

    Insurance and taxes, as well as escrow establishment/reserves, could easily be another $3k-$5k on an investment property depending on the region/state. 

    So, all in, approx figures of $2,500 in lender fees + $2,000 in points + $2,000 in attorney/title + $4,000 in tax/insurance/escrow/prepaids = around $9k-$12k, give or take depending on the state. $14k is a little high unless your FICO is under 680

    1Reply
  • Ted V.
    Lender · Member since 2024 · 19 posts · 8 votes
    1y

    Hi Josiah, I agree — hard to know if $7K is "high" without seeing the Loan Estimate and what exactly those fees are for. Are they showing as origination fees, points, for title/ insurance etc or something else? As others said, origination fees alone could be half of that. Are you buying down your rate? Also curious what your DTI (debt-to-income ratio) looks like — sometimes lenders stack extra fees if the DTI is tight.

    FWIW, at Tomo we don’t charge origination fees, so that could shave a couple thousand off right away if you want to compare offers. 

    0Reply
    • Josiah Guyer
      OP
      Member since 2021 · 9 posts · 3 votes
      1y
      Quote from @Ted V.:

      Hi Josiah, I agree — hard to know if $7K is "high" without seeing the Loan Estimate and what exactly those fees are for. Are they showing as origination fees, points, for title/ insurance etc or something else? As others said, origination fees alone could be half of that. Are you buying down your rate? Also curious what your DTI (debt-to-income ratio) looks like — sometimes lenders stack extra fees if the DTI is tight.

      FWIW, at Tomo we don’t charge origination fees, so that could shave a couple thousand off right away if you want to compare offers. 

       this is my estimated details sheet

      0Reply
    • Patrick Roberts
      Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
      1y
      Quote from @Josiah Guyer:
      Quote from @Ted V.:

      Hi Josiah, I agree — hard to know if $7K is "high" without seeing the Loan Estimate and what exactly those fees are for. Are they showing as origination fees, points, for title/ insurance etc or something else? As others said, origination fees alone could be half of that. Are you buying down your rate? Also curious what your DTI (debt-to-income ratio) looks like — sometimes lenders stack extra fees if the DTI is tight.

      FWIW, at Tomo we don’t charge origination fees, so that could shave a couple thousand off right away if you want to compare offers. 

       this is my estimated details sheet


       This is fairly normal. Lender fees might be a couple hundred high, but not bad. Points are normal for an investment loan right now - it's impossible to say if these are high or low because the bond market is so volatile right now. Title insurance seems expensive to me, but this varies by state. Also, the $2,150 in Govt extortion fees (transfer taxes) arent helping. 

      True lender costs are around $5k on this, including the points. Everything else is unlikely to change even if you swap lenders. 

      1Reply
    • Ted V.
      Lender · Member since 2024 · 19 posts · 8 votes
      1y
      Quote from @Josiah Guyer:
      Quote from @Ted V.:

      Hi Josiah, I agree — hard to know if $7K is "high" without seeing the Loan Estimate and what exactly those fees are for. Are they showing as origination fees, points, for title/ insurance etc or something else? As others said, origination fees alone could be half of that. Are you buying down your rate? Also curious what your DTI (debt-to-income ratio) looks like — sometimes lenders stack extra fees if the DTI is tight.

      FWIW, at Tomo we don’t charge origination fees, so that could shave a couple thousand off right away if you want to compare offers. 

       this is my estimated details sheet

      Not bad overall. Section A covers lender-controlled fees, so they’re likely making about 1–2% profit on the loan amount. Not all lenders charge these fees so you could save that money by shopping, that being said $2K for your loan size is actually lower than what many lenders would typically add. Overall, everything else looks solid. Have you considered shopping around to compare loan estimates?

      1Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    @Josiah Guyer $7k is high for lender fees on a $161,250 loan amount. Assuming SFR we'd be at $4,855 flat. ($3k flat origination + $1,855 underwriting). Not only that, even with all the market turbulence this week, assuming a strong FICO score, we'd likely sneak in under 7%. Happy to jump on a call for a quick side by side comparison.

    [email protected]818-606-8823
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    1Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    1y
    Quote from @Josiah Guyer:

    Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

    Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

    Thanks


    any prepayment penalty ? Is it a DSCR loan ? What state is it in ?

    0Reply
  • Deborah Wodell
    Lender · NC · Member since 2024 · 344 posts · 115 votes
    1y

    totaling 68k for fees seems a bit high for a loan of 215k. Although we'd need more details to determine. You can try shopping around with different lenders to determine if that is the usual rates and terms going around.  

    0Reply
  • Tarik Turner
    Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes
    1y

    Would need to know what there fees entail however 7k does sound high based on the loan amount

    0Reply
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