New 1st time home buyer

6 Replies

Hey BiggerPockets so I’ve been talking to some mortgage bankers . One specifically caught my attention . Bank Santander offered me a .625% discount on my mortgage because I’m making below the 50% median household income in the county. Now the closing costs was around 8,000. I would love some insight after reading all over BiggerPockets I feel that is ridiculously too much. Does anyone have any insight or any advice to lower the closing costs. This would be my first mortgage by the way . I also heard lender around 2000 closing cost with a higher interest rate. First time home buyer would really mean a lot!

My first thought is this: A .625% reduction on your existing mortgage? So is this a refinance? I would not refinance for less than a 1% reduction in the interest rate.

The closing cost can vary from lender to lender. You can call around and ask what they charge for the loan origination. Some have a straight fee while other will say like "1%'' of the loan amount. Also, closing cost will have other fees involved like property insurance, appraisal fees, filing fees, etc. Not much you can do hear except shopping around on the insurance.

Thanks Wendell but no this would be my first mortgage for a duplex. Either a FHA or the 3% down mortgage the bank is offering me.

That number sounds about accurate to me. My closing costs were around 10k but that's because I had to pay home owners insurance for the year which totaled about 1.9k. I would suggest whatever offers you put in to include a seller credit to closing costs with them. For example I put an offer in at full asking price of 195k with a seller credit of 5k and it was accepted so I only had to come up with 5% for the down payment and 5k to close.

Thanks I’ll definitely do that !

You need to look closely at your settlement statement. Are you paying back taxes? Prepaying taxes? Are there other expenses on there that you don't understand? For an FHA loan, you should be looking at closing costs in the range of 3%, maybe a bit less and a couple thousand in origination fees. I've never heard of a bank giving a discount just for the sake of it, but they could be charging you points to buy the discount.

Can I specifically ask the lenders what would be the closing costs on paper.? I know Wells Fargo gave me a pre qualification not a pre approval letter with all the closing costs

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