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Broker Fees??


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I have been approved for a mortgage(va) at 5.75 thanks to this board mostly, but i have a few questions about loan fees, this is what i am being charged:

1% origination

appraisal 450.00

tax service 77.00

processing fee 350.00

underwriting fee 535.00

wire transfer 15.00

escrow 350.00

title insurance 450.00

escrow courrier 45.00

recording 150.00

hazard premium 398.00 (is'nt that paid monthly)

What about these are they in line.

Also does a mortgage broker "hold" rate ie: bank is charging less than they charge me and they get a cut.

last, can i negotiate fees. My payment on the good faith is about 150.00 more a month than i want.

purchase price is 231,994.

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The Fees seem to be in line.

The Hazard Insurance needs to be paid for a year in advance at closing, and if you want to have the payment added to your house payment, then the lenders ask for an additional 2-3 months "cushion" to start the escrow account.

The "guess" on insurance seems to be VERY low, if this is a quote from an insurance agent, then you did very well, if not, then I would contact some agents to see what they will issue insurance for.


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On the rate, it depends what type of term your going in at. If this is a 30 year fixed, then you did very well. December of 2003, I got 5.65% for 30 Years. Also, it depends how long you plan on living in the home. If under five years, I would take a 5 year ARM.

All the other fees look typical. I paid 1% origination to the broker also. I was very impressed with my broker and it was the easiest loan I ever got.

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Processing fees and underwriting fees are not allowed on a VA loan, unless paid for by the seller.

For a thirty year fixed rate, you did very well.

Has the broker "locked your interest rate?

Escrows are always required on VA loans (FHA too!)

Now regarding the house payment, you have a decision to make as to wheher you want to purchase a $231,000 home or not. If you want the payment $150.00 less,you have two options: One would be to drop your loan amount down to about $205,000, or look at a VA 3/1 ARM (The 5/1 ARM on a VA loan is really close in rate to a thirty year fixed rate, so for the safety and security vs. a very small decrease in payment, I personally do not feel the need of the risk, of a "What if I stay in the house longer than 5 years?")

With either of the VA ARM products, the interest rate can only adjust (up or down) 1% per year, and 5% lifetime (so maximum interest rate could reach around 9% or so.

On a personal note, I have had an FHA ARM for over twelve years now with a start ate of 4.5%. I have never exceeded 6 7/8%, and currently have a 3 7/8% mortgage rate. This may help in your decsion.

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If you got a 30 year fixed loan then you did good. Ditto what Charles said on the Insurance. On a 200,000+ house I would suspect the insurance to be around 1500.00 annually. If you don't mind me asking, who gave you that rate, and what was your mid-score?


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Thanks for the info, for most people 20-30 per month extra should not be a problem, but never can tell.

Another comment: I just finished reading an article by Tom Hamilton that has a Q&A on real estate in the local paper every Sat. He replys to a home owner that got an "Incredible deal" where the re-finance lowered their payments from 1400 to less than 1,000 per month. Year later their payment go up to over 1500, because the taxes were not estimated correctly. I personally don't know how that could have happened, as most lenders ask for a Tax Cert for proof of Taxes, but it seems to in this case it did not happen. Now this poor borrower has to make 1500 payment for a year until the tax escrow account is brought up to current, and then their payments drop down to 1200. It still was probably a good move, saving 200 per month, but what a shock to have your budget set up at 1K and end up having to make 1500 payments for a year.

Please be careful when you do financing on your home, as most of the readers here are. Shop around, and if the best deal is WAY lower than everyone else, be VERY careful.


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