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2nd Mortgage closng costs?


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My wife and I are redoing our basement, new floors, walls, ceiling, a bathroom, plus egress window. Price $51500.

We both work, credit scores 720/719. Our value 360K - owe $116k on 1st mortgage.

The contractor knew a bank we could do a second mortgage with. Got their GFE, it was an eye opener on the closing costs. Looking at a loan of $56500.00 at 6.5% fixed 300mths term.

GE Money Bank out of Utah -

Loan Origination Fee $375.00

Loan Discount Fee $3467.87

Credit Fee $00.38

Inspection Fee $25.75

Settlement Fee $360.00

Title Examination $105.00

Recording Fees $76.00

City/County Tax $135.25

State Tax $402.80

Total Fees $4947.25

Spoke to other banks reqarding equity loans, rates ranged 7.25% to 9% with no closing costs.

I understand about buying down the rate, for the loan amount these charges same high?

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I would suggest that you go with a "no closing cost" deal, as long as you are aware that if you refinance/pay off that loan they will make you pay some closing costs back, appraisal-title-etc, probably until 3 years is up.

If you do the math, saving 1% in interest and paying 3400, will take you a long time to "break even".


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  • 3 weeks later...

Went to my local bank to have closing paperwork notorized yesterday. They asked me if I was doing the loan through them. I told them their interest rate was almost 1/2% higher. She didn't say anything.

Sent back docs via Fedexp.

2nd Mortgage - Loan Amount $70,000

30yr fix @6.8% $889 closing closing costs - 3yr prepay.

The Mrs and I are taking out alittle bit more to fix the upstairs bathroom as well.

Planning to double pay payment to reduce term, lower the net effective rate, and keep our credit scores in the 700's...

5/8/07 - 720/750/724

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