The lady buying my home is getting rip off...They are charging her?

Question

$8,000 for closing costs! I thought I might help her, does anyone know a good lending instutions that doesn't charge such high closing costs?

Here is the info:

The home is FSBO
She is seeking a conventional loan.
She is putting no money down
She has good credit.
The cost of the home is $152,000
She is paying her portion of closing, the only thing we are splitting is the title insurance.
An attorney wrote up the contract

ANY info would be greatly appriecated! Thanks

She is not paying points...

Answer 1

She is getting ripped off, but you should stay out of it. Giving her advice will cause a delay, possible withdrawl by the current lender and YOU WILL LOSE THE BUYER.

Stay clear or you will be the one to lose out.

This is hard advice but we all like to be nice and help people but you can't always save people from themselves.

Answer 2

That's about right, actually. She's not getting ripped off.

There's not much you can do about that, unless you want to pay some of her costs for her...

Each point on that loan is going to be $1,520.00. Two points (typical right now) will be $3,040.00. Another $1,520.00 for the loan origination fee brings it to $4,560.00. Interest to the end of the month would be about $800.00 so you're up over $5,400.00 already. One year's worth of homeowner's insurance plus property taxes, plus six months worth of impounds, plus survey, plus title insurance, plus loan processing fees and attorney's closing fees could easily add another $3,000.00.

Yep, that's pretty much dead on the mark! The fact that she's putting no money down is certanly hurting her. That's her choice and you should not worry about it!

Be wary of any replies from lenders or mortgage brokers. They have a vested interest in trying to sway your buyer. I'm just an average joe who has bought and sold a number of homes and is famiar with the costs involved.

Answer 3

There should be 1% origination ($1520.) Plus lender fees ($975)
Processing fee ($350) and then the title company fees (varies).
If she'shaving taxes and insurance escrowed that will increase the costs as they will probably collect for 10 months. I'd be happy to take a look at her GFE

Answer 4

The guy from Boston nailed it. A-Z . I imagine that you have a vested interest in this as to the scenario that she doesn't have the 8k so it is causing a problem with closing otherwise why would you care. My best advise to you since your a FSBO and not paying a commission is to pay as much of the 8k as needed.

Answer 5

She should shop her situation around to different mortgage planners and see which one gives her the best rates and programs.

There are more questions that need to be answered on why she would need to be paying $8k in closing costs, like whether she is paying points to buy down her interest rate, etc etc

To many unknowns on why, I would just suggest shopping her needs around.

Answer 6

I concur, bostonianinmo has provided the best answer to your question. Of course, every transaction is unique. As a warning, it is generally NOT wise for a seller to be involved in the buyer's mortgage issues. The more you get involved, the more you open yourself to a potential lawsuit if something should go wrong.

Answer 7

Every institution charges different fees then you have the attorney fees etc. etc. Try Wells Fargo, but can't guarantee they'll do much better

Answer 8

help her out there Angela! pay some of the closing cost yourself......who cares as long as you are getting your profit. O down? Well, there you go!