I'm looking at the closing cost good faith estimate prepared by my mortgage broker for our first home (hooray!). Some of the fees look suspicious, but there's conflicting information out there as to which fees are negotiable and which are pure junk. Can anyone help me figure out which ones are bogus (if any) and I should push back on?
This is for a 30 year fixed mortgage with 20% down on a $700k property (so $560k loan) in the California Bay Area
In particular, the $100 "document preparation fee" seems bogus. I've also read that I should never be charged both an underwriting fee and a broker fee, but both appear in the estimate!
You are correct, the "document preparation fee", "underwriting fee" and "broker fee" are profit items, basically anything that isn't a 3rd party/external charges that are just being passed through is negotiable. So it is possible to get a loan without any of them. Mortgage brokers need to make a living though so they are either going to charge explicit fees like these markup the rates (or both).
Underwriting fee is WAY too high. Should not be any broker fee. Why did you go to a broker anyway? They are notorious for putting in bullshit fees. Are you still early in the process or about to close soon? What, if anything have you paid them thus far?
ratdaddy said: Underwriting fee is WAY too high.I am afraid that your comment is meaningless. With a few exceptions, an underwriting fee is not a third party fee. Instead, it is just one of the fee categories that is used by loan officers to get them the overall profit that they are looking for. It is, therefore, silly to focus on the size of the underwriting fee and to ignore the rest. When you are shopping for a mortgage, you should ALWAYS focus on the total package of interest rate and closing costs rather than on the specific fee categories.
Should not be any broker fee. Why did you go to a broker anyway? They are notorious for putting in bullshit fees.There are some good brokers and there are some terrible ones, just like there are some good direct lenders and plenty of terrible ones. There are plenty of cases under which a broker receiving wholesale pricing from a lender will be able to offer you much better overall terms on a mortgage than the retail department of the same lender. Again, people need to stop worrying about the distinction between a broker vs. a direct lender, which are meaningless insofar as the competitiveness of a loan program is concerned, and start price shopping the overall quotes across a wide variety of providers.
bpp
Senior Member
posted: Nov. 13, 2009 @ 10:15a
Who does the underwriting fee say its going to? The fee should be to the third party (i.e. Chase, Citi, etc.). This might not be an actual profit item if he is a broker.
Also what does the YSP say? The broker will make his money on a combination of either the loan origination fee, broker fee, other junk fees, and YSP. YSP stands for yield spread premium. It might be zero since you are paying a point.
DjPiLL
Senior Member - 2K
posted: Nov. 13, 2009 @ 11:25a
millstone said: I'm looking at the closing cost good faith estimate prepared by my mortgage broker for our first home (hooray!). Some of the fees look suspicious, but there's conflicting information out there as to which fees are negotiable and which are pure junk. Can anyone help me figure out which ones are bogus (if any) and I should push back on?
This is for a 30 year fixed mortgage with 20% down on a $700k property (so $560k loan) in the California Bay Area
In particular, the $100 "document preparation fee" seems bogus. I've also read that I should never be charged both an underwriting fee and a broker fee, but both appear in the estimate!
"Government Transfer Charges" Recording fees: $120 City/County Tax/Stamps: $1072.50
"Additional Settlement Charges" 1st year hazard insurance premium: $1200
Total closing costs: $10614.50
Thanks for any help!!
I got a much better deal with Penfed. 90 day rate lock. Currently 4.875%. You pay 1% origination fee, but they waive a bunch of closing costs which offset paying the 1%. I am not paying any Underwriting, Processing, Broker, Bank Attorney, Credit Check, Application, or Appraisal fees.
I have to be honest, that deal kinda sucks.
bpp
Senior Member
posted: Nov. 13, 2009 @ 11:35a
DjPiLL said: millstone said: I'm looking at the closing cost good faith estimate prepared by my mortgage broker for our first home (hooray!). Some of the fees look suspicious, but there's conflicting information out there as to which fees are negotiable and which are pure junk. Can anyone help me figure out which ones are bogus (if any) and I should push back on?
This is for a 30 year fixed mortgage with 20% down on a $700k property (so $560k loan) in the California Bay Area
In particular, the $100 "document preparation fee" seems bogus. I've also read that I should never be charged both an underwriting fee and a broker fee, but both appear in the estimate!
"Government Transfer Charges" Recording fees: $120 City/County Tax/Stamps: $1072.50
"Additional Settlement Charges" 1st year hazard insurance premium: $1200
Total closing costs: $10614.50
Thanks for any help!!
I got a much better deal with Penfed. 90 day rate lock. Currently 4.875%. You pay 1% origination fee, but they waive a bunch of closing costs which offset paying the 1%. I am not paying any Underwriting, Processing, Broker, Bank Attorney, Credit Check, Application, or Appraisal fees.
I have to be honest, that deal kinda sucks.
The current rate from PenFed shows 4.875% with 0 Points for Conforming loans and 5.000% with 0 Points Jumbo but all loans have 1% origination fee. Jumbos at 4.875% has .625% points to buy it down. So for his jumbo it would really be 1.625% total at 4.875%. Probably not a bad deal.
DjPiLL
Senior Member - 2K
posted: Nov. 13, 2009 @ 11:41a
Oh I missed the fact that it was jumbo.
cughre
Addicted Member
posted: Nov. 13, 2009 @ 2:58p
Try Aimloan.com
I am shopping around as well and they were referred to me from a friend. Their costs seem very reasonable although the loan I am looking for is conforming.
Based on the price leading wholesaler that is an above par rate, meaning the bank is paying the broker AND he is getting the point. I would recommend you focus on negotiating that point down and leave the $100 fee's alone. Assuming your broker is able to deal with the highest level wholesalers and that you are the highest level borrower, that loan is generating over $8,000 in fee income to the brokerage.
I'm afraid they forgot the $1000 Frivolous Fee Preparation Fee, so you'll have to add $1k onto that. Ya know, they've gotta pay the people doing this stuff!
Xnarg
Senior Member - 5K
posted: Nov. 19, 2009 @ 5:49p
Don't forget 18% tip.
millstone
New Member
posted: Nov. 19, 2009 @ 7:26p
Thank you to everyone who posted an answer. It seems like we have some room to negotiate.
Syrex
Member
posted: Nov. 25, 2009 @ 8:24p
No need to start another thread, so can someone review my refi? Currently I'm with citimorgage (30yr/5.875%) and just recently got them to drop the escrow so that I can pay it myself. Refi 15yr fixed. 4.25%, $202k loan option 1 (continue to wave escrow and pay a .25% to waive impound fee) Appraisal: $400 Credit report: $29 Lender fee: $725 Escrow fee: $438 <-bogus?? Title fee: $417 Waive impound fee: $505 (escrow fee bogus if I have to pay this?) out of pocket: $2,614
Option 2 w/ escrow same as above minus $505 impound fee total: $2,109 prepay items because of escrow: $1,757.75 out of pocket: $3,450.75
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