What is an average closing cost on approx. 122,000.00 loan?

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a loan started out to be just a refinancing of a house now it’s end cost is 256,000.00 with closing cost of 4277.00, financed amount is only 118,576.00. Does this sound right?

  1. Reply
    November 10, 2011 at 12:24 pm

    Not sure what it would be today but..
    Check out the larger Banks like Franklin Templeton or Wells Fargo. Go Online and have them bid on you. It will be much better and cheaper on your pocket. Don’t let anyone tell you it is safer to go with your local Banks. If they are Federally protected which you will know as you are going through the process then it is no different except for the “Fees” they slap on you. The larger institutes are so big they do not need to hit you with the extra charges. They will do anything to get your business, especially if you have a good credit line. Do your homework. it will be worth it in the long run.

  2. Reply
    November 10, 2011 at 12:29 pm

    Sounds to me like you are looking at your Truth-in-Lending form, and getting confused by it. If you have $ 4277 in costs that actually count against APR, that does sound a little high, but it can also be affected by the date of the month on which you close.

    The amount financed is the APR closing costs (not all costs count against your APR) subtracted from your actual loan amount, since you are not getting the entire $ 122K. If you pay back $ 256K in interest over 30 years, that’s about normal, though it sounds like you may be getting a rate of 8% or higher? If so, you either have poor credit or are getting screwed. Unless your credit score is under 580, you shouldn’t be paying more than 7% right now.

    The TIL form was created by HUD to make shopping for a mortgage easier. It’s done nothing but confuse everyone, so you aren’t alone.

  3. Reply
    t D
    November 10, 2011 at 12:37 pm

    Depends entirely on your state.

    For example, Florida does not have a state income tax, so they charge heavy taxes on mortgage loans.

    Fees are broken down into many parts, and without listing what the fees are going to, it is not fair to make a judgment call on your fees. If, for example, $ 3,000 is going to state taxes, then this loan is not very expensive at all. If, however, $ 3,000 is going to the broker as “origination”, “points” or the like, then it MIGHT be an expensive loan.

    In Ohio, you would expect to pay about $ 2,300 in the basic, non-broker, related costs. This includes title, pre-paids, taxes, and insurance escrows. This would mean about $ 2,100 to the broker.

    In the scheme of things, $ 2,100 is not a lot of money to pay a broker – depending on whether they are also getting paid on the interest rate. Look for a little number somewhere on your “Settlement Statement” called “YSP” or “Premium” or Yeild Spread Premium. The number next to this (not added in the big column) is the amount the broker is getting from the bank outside of closing for arranging this loan.

    In our example, if this amount was about $ 1,000, I would say this broker was fairly paid. Some might disagree with me, but about $ 3,300 in broker income is average for the industry. If it is over this, you’ll need to consider what you are comfortable paying.

    If you are within 3 days of the loan closing, you have the right to “rescind” the transaction by following the directions on the rescion paperwork. Follow them closely, as you likely have to fax the paperwork to the lender – not your broker.

    If it is after 3 days, you’ll be happy to know you are better informed today than you were then. You likley will have no recourse.

    See a lawyer if you feel really screwed, but don’t rely on the end cost to make your decision. You can pay off a 30 year mortgage about 6 years early by simply making an extra payment each year.

    Finally, if your credit is bad, you should expect to pay more. It’s not that you are getting screwed, it’s just people are taking a bigger risk lending you money.

    Best of Luck.

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