First Home Purchase: Help Reviewing Fees?

[GoodSense]

I was a realtor for a few years in the upper Midwest. It may vary by state, but here is my take if this were in my state.

Loan Origination Fee: $543.75 – very reasonable or even on the low end.
Appraisal Fee: $330.00 – reasonable.
Credit Report: $14.00 – reasonable.
Tax Service to Company "X": $80.00 – never heard of
Flood Cert to Company "X": $8.00 - reasonable
Mortgage Co. processing fee: $400.00 – somewhat reasonable
Interest from 10/22 - 11/01: $246.70 - reasonable
Hazard Insurance Premium: $331.92 – reasonable but should compare a few companies’ quotes
County Property Taxes: $206.25 – reasonable
Settlement/Closing fee to escrow co.: $621.25 – seems high. In my area settlement/closing fees range between $220 – 310.
Detailed Escrow Fees (see below): $445.00
Prepare docs/email fee: $200 – junk fee
Loan tie-in fee: $175 – what is this?
Federal express: $40 – seems high
Messenger fee: $30 – may be OK
Title insurance (lender's coverage): $400.00 - reasonable
Sub-escrow fee: $62.50 – what is this Never heard of it.
Lender's Endorsement: $125.00 – not familiar, could be a junk fee but could be legit
Additional fees (see below): $656.15
Messenger fee: $30 – may be OK
2008-2009: 2nd Install. Taxes: $626.15 – Why are you paying the second ½ taxes again? You’ve already paid the prorated amount from closing to the end of the year above, right? Is this one of the lender’s escrow amounts? Do you get it back when you pay off the loan?
Recording fees (Deed/mortgage): $105.00 - OK
Messenger fee: $50.00 – again??
Quarterly HOA dues (Oct/Nov/Dec): $33.00 – seems too low
Transfer Fee to Company "X": $275.00 – junk fee
Document fee to Company "X": $200.00 – junk fee
Capitalization fee to Company "X": $400.00 – junk fee
Notary Signing fee: $175.00 – junk fee
Funds hels for: Refundable padding: $500.00 – junk fee

Typically for your price range, at least in my area, closing fees are about 2.5% to 3% of total sale price, including prepaids and escrows.

Hope this helps

[quietman]

This deal is loaded with "junk fees" which are just another way to say the lender is adding whatever they think they can get away with in an attempt to take advantage of you or your seller. Maybe credit markets are so tight, they believe you have no option to use a better lender. Maybe they think you are remote, military, inexperienced or fit some other demographic that means unsophisticated and fleeceable. I would walk from this deal, but you have to make your own decision. If you want the house enough, maybe you will pay whatever they pile on.

[Hobo]

LeBanc, I was a Navy Officer during Vietnam. I made enough money from buying and selling real estate to retire at age 50. Please excuse me if I am looking at your purchase through the eyes of an investor. It just makes my adrenaline flow to think of the opportunities you have at your disposal right now - but you both lack the knowledge and give big organizations way to much respect.

Here you are an Air Force Officer, with plenty of money for down payment - the absolutely perfect home buy in the eyes of the sellers. And the bank could not be in a worse position. They don't want houses, they want money! The US government is giving them tons of money just to stay alive and lend money to people like you. And buyers are very, very hard to find right now.

Yet the bank bought the house for $151k and selling it for $165k - that's a quick $14k profit. They should be begging you to take this house off their hands. Remember, the housing crisis is not finished yet. The price of houses could get even lower. I bought my first house for $15k in Southern California.

Remember, you are talking BIG money here! Why should the bank make $14k? They should be happy to give it to you at their cost. And honestly, bogus closing costs are the oldest trick in the book. You know it is not costing them that much money to do this deal.

Start demanding the ridiculous things - and use the other resouces at your command, especially the letter to the editor of the newspaper. No bank wants to look like they are cheating a serviceman - and banks are trying very hard to improve their public relations.

What defines fair? What defines a "good price"? Only the willing buyer and the willing seller can determine that. Past home prices mean nothing now. Tell the bank you want to pay $151k and no closing costs. Will they accept? Maybe! If not, maybe you can save an extra $10k in the negotiation. THAT IS A LOT OF MONEY - don't let them tell you "this is how the system works." Everything is negotiable. Remember the Golden Rule: He who has the gold, rules!

Good luck on your quest. I wish I could send you a flash disk with all of the experience and knowledge in my brain, so you could plug it into yours!

[jblack]

DW and I took advantage of the good buyers market & mortgage rates a few months ago (also had to sell our previous home), and I did a lot of homework on lenders, closing fees, etc. We ended up with Pentagon Federal who has good rates and ridiculously low fees.

About a month after closing/moving I was out playing golf with a buddy and we got paired up with a guy who was a mortgage broker. We got to talking and he said that lenders make it difficult to compare the total cost of a mortgage. They can make their profit either 'up front' or 'on the back end', which means either with higher processing/junk fees at closing or with a higher interest rate....or somewhere in the middle.

So FWIW, if you know you're getting a very competitive rate then it may be difficult to get them to remove some of those junk fees, but otherwise kick and scream to negotiate them down.

Also, the fact that the seller is kicking in $5k of the closing costs shouldn't affect how much those costs end up being. Your lender certainly doesn't care who pays for them.