Posted by Larry/Ca on 11/3/06 3:24pm
Msg #157122

OT Refi offer

Curious, I just got a refi offer on my house for a 30 year fixed at 6% rate. The total closing cost to me are $5565. Another offer was 7% if I wanted a $0 closing cost loan. The difference in payments is about $100 more with the 7%. I intend to stay in my house for ever so after about 4 1/2 years the no cost will start costing me $100/mo more than I would be paying with the 6% loan. Anyway does $5565 closing costs seem excessive on a $175,000 loan?

Reply by Martha Gall on 11/3/06 3:28pm
Msg #157123

Re: OT Refi offer I Just did a 60,000 HELOC 5,000 costs N/M n/m

Reply by Ndwa on 11/3/06 3:42pm
Msg #157128

Is that the bottom line? I think that's a little below average from what I've seen.

Reply by Charm_AL on 11/3/06 3:47pm
Msg #157131

yes, seems excessive to me. We went thru Wachovia and got a great deal on our refi last year combining an 80/20. It's shame, I saw 9k closing costs last week. But as with everything else, we have no idea why costs are what they are.
Poor/no credit. Late pays, LTV, income, there are some very creative brokers out there that will scoure the ends of the earth to get you financed at whatever price they can.
It's also a shame to see great credit get taken advantage of this way, including PMI and so on. Some preditory lenders bank (literally) on consumer ignorance. Shop around and make sure you're getting the best possible for your scenario.

Reply by Mung/CA on 11/3/06 4:04pm
Msg #157137

2-3% of the loan amount is reasonable. n/m

Reply by sue_pa on 11/3/06 4:04pm
Msg #157138

Larry, I don't want seem mean here but what do you do for a living? Yours is the kind of post that drives me crazy. What do you think a TIL & the APR does for you? If you don't understand this basic document, how do you do your job?

Reply by Larry/Ca on 11/3/06 4:28pm
Msg #157145

Sue, you are not being mean......

this was only one of several offers I'm considering and I don't really pay much attention to the closing costs in relation to the amount borrowed on the signings I do. The fact that I can explain the TIL and APR to the borrowers doesn't help me weigh wether or not the closing costs in the offer presented to me are reasonable or not. The prior post stating that they should be 2-3% does help as the $5565 I was quoted included points so the loan origination fee and other cost to me were very close to 2% of the amount borrowed.

Reply by Charles_Ca on 11/3/06 4:37pm
Msg #157149

Re: Sue, you are not being mean......Sounds reasonable

I do mainly A paper and usually charge 1 in the front and 1 to 1.5 in the back. Depending on the amount of work sometimes I go 2 in the back but that is unusual.

Reply by Jason on 11/3/06 4:36pm
Msg #157148

I would shop the loan

I am seeing lower closing costs from
Citibank
Chase
Countrywide

The bwrs getting low lender fees are the ones who shop the loan.

If it were me:
I would go to MyFico.com to see what % I rate I could get. then....
I would call above 3 + my local credit union and tell em Im giving my business to the lender who gives me the best deal fast.

30 yr fixed, even payments. No balloon/step crap.
I would tell lenders what max % I expect.

I would tell em to give me total lender costs, not just origination or applic or yaddah yaddah.

I'm registered w/ OptOutPrescreen.com so the 4 lenders would see they r the only ones bidding for my business.

I would tell em no PPP. The minute I see one, I block their # from my phones.
Even if yr going to stay in hse 4ever, dont agree to PPP. Medical stuff happens.

I would name TC. 3 out of 4 here are crooked.

It's a brwrs' mkt right now. Go 4 it.

Reply by Charles_Ca on 11/3/06 4:42pm
Msg #157150

Re: I would shop the loan, ~ So have you got a loan yet?

Rates aren't everything and you can buy down rates. I think you need to use a lender who sells on a different basis. I see a lot of people going the mass marketer route and rarely do I see them getting a decent loan.

Reply by Larry/Ca on 11/3/06 4:58pm
Msg #157155

No Charles, no loan yet ......

this was a citibank offer and $3350 are the total fees after subtracting the points (1 1/4) to get the 6% fixed. This is a loan for $175,000. Charles I don't know what 'front and back fees' mean. Does that mean your fees start at 2% and run as high as 3 1/2%?

Reply by Charles_Ca on 11/3/06 5:23pm
Msg #157158

Typically in the front means origination costs. Usually the

costs are split with 1 point for origination costs and are usually paid upfront. In the back is shown as YSP (yield spread premium) or SRP and comes out of the proceeds of the loan (the borrower does not see the cost directly) YSP and SRP are the same charge the only difference being that YSP is charged by Brokers like myself and SRP (Service Release Premium) by banks and their correspondants. The other major difference between YSP and SRP is that YSP must be disclosed on the closing statement and SRP doesn't: a gift to the banking community by the lawmakers. 2% is a pretty typical loan and buying down interest is a good way to go.You can try and negotiate down the upfront costs. I you have good credit and an easy loan you shojld be able to get the 1% in the front down to 1/2%, it deosn't cost anything to ask. My comment regarding having a loan was directed at Jason. I hear a lot of people enjoying bashing LO's much like some people enjoy bashing notaries and real estate agents. When one has to deal with aggressive sales in a loan situation the chances of them getting a good loan are in inverse proportion to the amount of aggression expended on both sides. I don't like antagonistic situations. There are plenty of good prospects without getting into a pi@@ing contest with anyone and there is plenty of good business to go around. Good Luck Larry, there some good LOs out there, just as in any business.

Reply by Larry/Ca on 11/3/06 7:52pm
Msg #157180

Thanks Charles N/M n/m

Reply by Poppy on 11/3/06 10:57pm
Msg #157217

Larry... When comparing a no cost vs. paying points it's

not a matter of how long you plan to be in your home that you need to consider. It's a matter of how long you plan to keep the loan.... (This is seldom ever the same thing)

Is this for a full doc loan? Are the fees for recurring and non-recurring closing costs? Is your credit good? Have they sent you a GFE?

As you know it would be difficult to advise as far as rate and fees are concerned without all the details...

Reply by PA_Notary_II on 11/4/06 9:23am
Msg #157263

Re: Larry... Front vs Back points

Front points are the origination fee charged by the broker or lender. Back points represent the fee paid to the broker by the lender for refering the business. What they usually don't tell you is that the back points are based on the final interest rate. The broker gets extra dollars for every eighth of a percent they can bump up your interest rate. I have seen brokers charge 3% up front and collect 3% on the back. Depending on the LTV in your situation you may be able to qualify for a zero cost HELOC where the lender pays ALL closing costs. Countrywide does this, as do many local banks. Might be worth it for you to check it out.