MORTGAGE gurus - what do you think of these loan terms offered to me??

[Craig 930 RS]

Appraisal - $400
Underwriting fee - $695
Processing fee - $450
Closing fee/escrow $485
Title insurance $314

Interest rate - 4.375%
1 point
20 year fixed
$105,000 loan

~~~~~~~~~~

Thoughts on the above 'fees'? High? Due to low interest rate?
Opinions?

I plan to say in this house for a long time -

[jwetering]

Ummmm - OT much?

[BReyes]

They are charging you a lil bit for a loan. Yes. And they are making a lil on the back. The reason for the loan (v. 0 LTV) is important.

Regards,

[svandamme]

interesting, the interests in Europe aren't that low yet, then again, our European Central bank ain't that low either compared to the US central bank.

however, the difference in the end product, the mortgage is smaller... i got a 4.85% , 140K euro's for 30 years fixed last week... but i went for full finance, didn't bring anything to the table, probably could have knocked off a couple a bit if i had gotten the price/mortage at say 80%...Or if i wasn't single, and had a wife with income to split the bills.. fees are just 300 "setup fee", no appraisal or any of the other stuff you listed...

But there was no point in waiting , with the current market, (and i think banks will get very difficult in 6 months). Renting just costs me to much money for the house i get in return...

on a monthly basis, after all tax rebates and costs are in, i'll be paying 60 euros more then my rent is now... no brainer really

The other option i got was 3.18% accordion mortgage... tempting stuff at first
They start you off on a variable, adjustable per year, fixed monthly payments.
25 years, if the interests go up, the duration increases, with a cap of 30 years
If the interests go to say 8% and stay that way , they eat the difference in the end

Either way, it's cheaper then a 30 year fixed, no risk in that department

Didn't go for that, since the catch is, that if the interests go up, you don't have any capital payments
Let's say i want to sell in 5 or 10 years, and could very well have been paying all interest/ no capital... and i get nothing other then the increase on the house...


for example
140K, accordion, 680 a month, for 25 years, or 30 years
or
140K, fixed, 730 a month, for 30 years

the accordion is cheaper in the long run, but exiting early, if the interest don't stay low means you did not pay off anything


since i'm single, and don't know what i'll do in 5 years time, let alone 10
And i don't believe for one second that the interests will not go up at one of those yearly revisions, it's a risk i cannot take

[HardDrive]

Wow. That is getting crazy low.

[blk911]

That is a pretty good deal if you can still get it. The title policy and closing fee/escrow actually go to the title company and not the lender. The appraisal fee is paid to a third party appraiser so the only fees the lender is getting is the underwriting and processing fee (and maybe an origination fee?)

Bond market clobbered today as the Koreans said they were selling US Treasuries. Rates could be higher tomorrow, but this is a very strange environment.

[Netspeed]

Originally Posted by Craig 930 RS

Appraisal - $400
Underwriting fee - $695
Processing fee - $450
Closing fee/escrow $485
Title insurance $314

Interest rate - 4.375%
1 point
20 year fixed
$105,000 loan

~~~~~~~~~~

Thoughts on the above 'fees'? High? Due to low interest rate?
Opinions?

I plan to say in this house for a long time -

The title and escrow are a little high but that rate! Where did you get 4.375% on a 20 year? They must have locked the rate a couple of weeks back....awesome!
Also, I doubt they're making anything on the back end at that rate and 1 point on the front on that loan amount is really decent.

[Craig 930 RS]

What's weird is that is today's rate -

Man, the fees are confusing - are the lenders required to include escrow reserves in the Good Faith estimate?
Didn't see it as part of the estimate for the 4.375 loan, but the $1900 is on the 5% GF Estimate from another company.

Thoughts?

[Netspeed]

Originally Posted by Craig 930 RS

What's weird is that is today's rate -

Man, the fees are confusing - are the lenders required to include escrow reserves in the Good Faith estimate?
Didn't see it as part of the estimate for the 4.375 loan, but the $1900 is on the 5% GF Estimate from another company.

Thoughts?

They should include the impounds (taxes, hazard insurance, and mortgage insurance [if any]). The rate is what gets me...the absolute best I could get on a 20yr fixed today is 5.5%. Maybe your state is different from California. I'd make sure they didn't typo the rate.

[Zeke]

Originally Posted by blk911

That is a pretty good deal if you can still get it. The title policy and closing fee/escrow actually go to the title company and not the lender.

Only if one and the same.

Originally Posted by blk911

The appraisal fee is paid to a third party appraiser so the only fees the lender is getting is the underwriting and processing fee (and maybe an origination fee?)

Broker works for origination fee or a portion of the point(s), not both. There is at least one too many fees listed, take your pick. Mine would be to remove the "underwrting" fee if not in addition to the "processing" fee. But, it's not a buyer's market when it comes to the money these days. So, you may end up paying one or the other of those two bogus fees. Just my .02. I've had a few loans in very different markets over the years.

[Netspeed]

Originally Posted by milt

Only if one and the same.
Broker works for origination fee or a portion of the point(s), not both. There is at least one too many fees listed, take your pick. Mine would be to remove the "underwrting" fee if not in addition to the "processing" fee. But, it's not a buyer's market when it comes to the money these days. So, you may end up paying one or the other of those two bogus fees. Just my .02. I've had a few loans in very different markets over the years.

The underwriting fee is most likely the fee that the lender is charging to look and process the filwe on their end. As for the processing, the broker probably has an in-house processor that gets paid to verify all income and employment plus put the file in stacking order to send to the lender.

[Big Ed]

That's a good deal if it is still available.

[Rick Lee]

Underwriting, processing and points are the only fees the mortgage company has any control over in your scenario. Title insurance rates are set by the state and escrow is for taxes and insurance. If the lender makes any money on those, it's from the interest in the escrow account, which is very negligible at your loan amount. Appraisal is totally separate and you'll pay it no matter where you go. I don't see a flood cert. or credit report fee in there.

[Craig 930 RS]

Looks like 4-5 yrs to recoup the higher underwriting & processing fees - the norm looks to be quite a bit lower?
$50 total of those two fees with a 5% loan.

Almost seems like like a points fee in disguise?

Thoughts?

[aigel]

Shop around and use a good mortgage calculator to compare your options, including keeping your old loan. It looks like a good deal, but compared to what?

George

[schamp]

You may get hit with some additional fees. Tax fee, where you pay 50.00 a year for the mortgage company to get a copy of your tax return. Good luck.

[FenderGuy]

Originally Posted by Craig 930 RS

Looks like 4-5 yrs to recoup the higher underwriting & processing fees - the norm looks to be quite a bit lower?
$50 total of those two fees with a 5% loan.

Almost seems like like a points fee in disguise?

Thoughts?

GFE will reveal all fee's front and back, most people dont know how to read them so they just sign away......

[Netspeed]

Originally Posted by FenderGuy

GFE will reveal all fee's front and back, most people dont know how to read them so they just sign away......

True...

[RANDY P]

Originally Posted by Craig 930 RS

Appraisal - $400
Underwriting fee - $695
Processing fee - $450
Closing fee/escrow $485
Title insurance $314

Interest rate - 4.375%
1 point
20 year fixed
$105,000 loan

~~~~~~~~~~

Thoughts on the above 'fees'? High? Due to low interest rate?
Opinions?

I plan to say in this house for a long time -

On the surface, for a 20 year fixed loan that is CHEAP. That's a good deal.

One thing - the guy writing the loan cannot legally MARK UP title, appraisal, escrow, or even the UW fee if that's a broker you are talking to. So, if he quotes that and the appraisal comes in at $350 he can't keep the change.

the Underwriting fee is real, if that is a broker you are talking to, the bank does in fact always charge a fee for that, it's typical.

The loan officer CANNOT just add fees to the loan prior to you signing, so if you walk into signing and see there are more fees, unless he disclosed it to you with a new updated GFE at least 3 days prior to closing then that is considered bait and switch.

Don't fall for that argument that the "good faith estimate is just an estimate so it can change..." if it does change, legally the lender has to re-disclose it 3 days prior to signing.

One other thing - another way of looking at this is to take the NEW proposed principal and interest payment you were just quoted, and applying that new payment to your existing balance-

so, just increase your monthly payments against your existing loan to see if in fact it pays off in similar time or quicker than the new loan does.

at $100K balance, it's tough to show any benefit to refinancing to a lower rate by itself since after fees it raises the balance high enough so whatever you save in interest is made up by the fact you borrowed more.

If you aren't taking any cash out, are trying to get out of an adjustable, or have any dire need to lower your payments if you simply can't afford it I'd strongly try calculating what would happen if you applied the new payment against just your existing balance to see how fast you'd pay off - I'll bet you won't really be saving anything if you really took a good look at it.


Otherwise, IMHO that's a good deal for that rate.

EDIT: another analogy:

think of it like gearing VS. tire diameter...

[Netspeed]

Originally Posted by RANDY P

...One other thing - another way of looking at this is to take the NEW proposed principal and interest payment you were just quoted, and applying that new payment to your existing balance-

so, just increase your monthly payments against your existing loan to see if in fact it pays off in similar time or quicker than the new loan does.

at $100K balance, it's tough to show any benefit to refinancing to a lower rate by itself since after fees it raises the balance high enough so whatever you save in interest is made up by the fact you borrowed more....

Great advice! In this century, too many people have expected market conditions to help them build equity. Paying just a $100 more towards the principle every month does wonders....just make sure you notate that it's for the principle.