Maryland Closing Costs - 12k on a 106k loan??

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Maryland Closing Costs - 12k on a 106k loan??

Robert C.
Investor · Northern VA · Member since 2019 · 45 posts · 5 votes

Hi, my lender is quoting 11.8k in closing costs on a 106k conventional loan for a property in Baltimore County. This is just for closing costs +  prepaids, excludes discount points. It seems insanely high. 

Does this sound normal?

Thank you in advance.

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y
Originally posted by @Robert C.:

 Appraisal fee will typically be paid outside closing. ($600)

Discount points is you buying down the rate, optional. ($1,061.25)

Owners title insurance optional ($500)

Real estate agent admin fee is an agent cost, not lender or title fee ($495)

Escrow account is optional if you are putting 20% or more down.

Credit report fee seems high at $132.50. Id expect this more in the $25 or less range. Real estate agent admin fee seems high, Id expect this at $395 or less....however, most agents actually lose money servicing properties at this price point, so they may have bumped that up to cover fixed costs. (I actually wont touch properties this cheap at all since I lose money on them)

Nothing else looks out of the ordinary.

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  • Nick MacklinPro Member
    Real Estate Agent · Oak Harbor, WA · Member since 2016 · 129 posts · 38 votes
    5y

    Origination fees rose significantly on qualified non-owners occupied mortgages about 6 months or so ago. 2-3% is normal now as opposed to 1% or less before that. Doesn't seem out of the realm of possibility but definitely seems like it's on the higher end. I'd recommend reaching out to multiple lenders. 

    2Reply
  • Justin Lanciault
    Realtor · Washington, DC · Member since 2018 · 166 posts · 88 votes
    5y

    Definitely seems high, but can’t really comment without knowing the actual breakdown. With lower priced homes they do tend to tack on additional fees.

    1Reply
  • Richard Mollel
    Real Estate Agent · Bowie, MD · Member since 2015 · 30 posts · 15 votes
    5y

    Hi, some fixed costs are the same regardless of loan amount. Title search, appraisal + rent schedule, etc would cost the same for a 500K+ vs 100K loan.
    Although without a breakdown, it's hard to reason whether 11.8K is reasonable or not. Generally speaking, seems high, unless you are paying points on the loan.
    It's best to use alternative loan types for small balance loans, e.g. lines of credit on another property.

    2Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Post The CD Loan Estimate and we can look at each fee. 

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  • Robert C.
    OP
    Investor · Northern VA · Member since 2019 · 45 posts · 5 votes
    5y
    0Reply
  • Robert C.
    OP
    Investor · Northern VA · Member since 2019 · 45 posts · 5 votes
    5y

    Thank you so much for the feedback everyone, really helpful! So sounds like it's within the realm of normal. Posted the estimate above.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y
    Originally posted by @Robert C.:

     Appraisal fee will typically be paid outside closing. ($600)

    Discount points is you buying down the rate, optional. ($1,061.25)

    Owners title insurance optional ($500)

    Real estate agent admin fee is an agent cost, not lender or title fee ($495)

    Escrow account is optional if you are putting 20% or more down.

    Credit report fee seems high at $132.50. Id expect this more in the $25 or less range. Real estate agent admin fee seems high, Id expect this at $395 or less....however, most agents actually lose money servicing properties at this price point, so they may have bumped that up to cover fixed costs. (I actually wont touch properties this cheap at all since I lose money on them)

    Nothing else looks out of the ordinary.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    5Reply
  • Robert C.
    OP
    Investor · Northern VA · Member since 2019 · 45 posts · 5 votes
    5y

    Massive thanks @Russell Brazil for the feedback and for stepping through it. That's an interesting perspective as well, it has not occurred to me..

    @Richard Mollel, that's a good tip, re alternate loan types for small loans! I'll have to think on that

    @Nick Macklin, @Justin Lanciault & @Account Closed, thanks so much as well

    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    This is the common misconception I see over and over on BP. That all I need to buy a property is the 20% down. No way. 

    0Reply
  • Matthew M.
    Los Angeles, CA · Member since 2018 · 86 posts · 86 votes
    5y

    @Robert C. It does seem a bit high but not way out of line. I typically budget 9% for Baltimore county row homes I have purchased. Get the breakdown from the title co to get a better picture, it’s not just origination but taxes and fees you pay to the state and county. Prepaids of a full years taxes are going to probably be 2-3k and if you are prepaying your insurance it can all add up pretty quick.

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