home closing?

Question

I am buying first home. My broker quoted me a payment and closing costs. then when e-mailed documents payments and closing costs were higher then he said it would be. I expressed my concern and he said he would try to re-work my loan. A few hours later he e-mailed me docs to show new payment amount and news closing costs. The payment was right but he said in order to get it ther closing costs had to go up. The loan amount is $122500.00
These are differences.
origination fee:$1225.00 to new fee of$1837.50
credit report $34.50 to $0
underwriting fee$600 to $570.00
tax service fee$0 to $80.00
escrow waiver$0 to $230.00
closing fees$250.00 to $100.00
doc prep fee$0 to $150.00
Title ins $100 to $214.00
endorments$75.00 to $0
rec fees $100 to $150.00
misc shipping and copying fees$0 to $40.00
Sec lein title fees$0 to $50.00
this is an 75/25 loan
first offer 6.375% for 75 loan 8.875%25 loan
new offer6.125% for 75 loan 7.875% 25 loan

it seemed to really jump considering it is the same loan amount and lender, is that normal?

Answer 1

What probably happened was (& this is the lender's fault for not educating you earlier) he didn't LOCK in your rates in the beginning which should have been done.

If rates went up slightly & there was no "lock" your payment would go up.

So in order to get the "original rate" he's asking you to come in with more closing costs so you can "buy it back down".

If you have time, let's just say (1-2wks) prior to closing on your purchase or refinance, tell the lender you want to check his rates with another lender. Call a Large Bank (BofA, Washington Mutual, Wells Fargo etc) Give them all of your info (income etc) as quickly as possible, go ahead & let them run your credit.
Tell them you need an answer urgently, if you supply them with what they need you can get an answer quickly.

you may get a better deal w/ a larger bank. Yes, this stinks for the current lender who's been working on your loan all this time, however they didn't do their job correctly & should have locked in that rate.

When they originally give you a Good Faith Estimate, their "costs" like underwriting, doc prep & other fees should not change.

Answer 2

What you didnt mention was your credit score or grade. What it looks like to me is that between when your broker quoted you the rate and the time you got the GFE, rates had gone up and the broker had NOT locked your loan. Im guessing the increased Origination fee is to cover the cost to buy your rate down to where he can still make money.
Personally, Id pitch a fit. Notice the original origination fee was 1 percent. Totally fair for the broker. However the new offer is an origination fee of 1.5%. The broker should eat the buy down and not charge your more origination if he blew it.
The credit report for free is a good deal. The broker will have to pay that cost out of his pocket.
Underwriting fee is fair.
Everything else is fair
The rates are good.
What I DONT see on the GFE is the YSP which shows on the good faith as compensation paid to broker not by borrower.
I would ask your broker what that amount is.. If the amount is more than 1% its too much. Negotiate with your broker.
Brokers work hard and deserve to make money.. but if the broker made a mistake or something happened that he didnt count on, he should have told you.
Also, the law requires when ANYTHING changes by .25% or more that a NEW GFE is required to be sent to the client.
I hope this helps.

Answer 3

Since you're using a mortgage broker and not a lender (as I understand in you question), he doesn't have control over all fees listed, such as title insurance, escrow waiver, tax service fee, etc. Those are fees charged by the closing attorney. His adjustments are in the origination fee and the credit report fee. Lender charges include underwriting and doc prep. Although you're paying a bit more at closing, you'll recoup those costs quickly through the lower interest rates. The charges are in line, you're not being taken advantage of. The original quote may have been on a Good Faith Estimate which may change (but not much) when it comes to closing. I also assume you're getting a 30 year fixed rate loan. If this is the case, the rate and closing costs are within normal range and quite fair.

Congratulations on your new home.

Answer 4

Looks like he bought down the rate with another half point -- look at the loan origination fee. I'd wager that you didn't have a rate lock or your lock had expired. That could cause the payment to increase but would also allow the lender to work it by charging the additional half point. They may have also switched closing agents or title companies as evidenced by the shifts in the other closing costs.

Answer 5

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