I got an offer at 9.85% and 10,000 closing costs. Not a good deal.
sounds like a subprime loan....is the rate fixed (most important)
and also is it a minimum payment loan or interest only?? (stay away from these...even though loan payments are cheap...u will never i mean NEVER pay them off)
and for future refrence 10,000 may not really be all that much...for instance do u think 10K is alot if ur loan is for 500K (that would be well below market)..but if we are talking bout a 50K loan ...I feel ur pain.
so everything is relative....keep in mind as well, that if u call ur neighborhood bank...say chase or key bank or flagstar, or bank one..or etc etc...they only tell u how much THEY personally are chariging u..thats why most people eyes light up red when they hear 10K...cause most mortgage brokers give u the entire cost....Title fees/ Tax fees/ closing cost/ and THEIR FEE....10 to 1 the broker is only charging 2-3K (depending on loan size)...(typical honest company charges 2-3 % of loan size...so i am basing it on 100K)..BUT the title cost on a 100K home in michigan for example is 550$ for the insurance and there is 3-5 other fees the title company charges that total around 500$.....so 1K from title.
Also most people escrow taxes and insurance on their loans....if u do not, u still may have to pay a portion of the taxes or the full year insurance if EITHER of them is due in 4-6 months from closing (almost 90% of banks enforce this nationwide)...so if ur taxes are 200 per month and u have to make ur 6 month tax payment then its minimum 1200$ there and 400-1000 for one years worth of insurance...so that is roughly 2K there +...(u following???)
so so far its 3 K from broker + 1K from title + 2K from taxes/ins (and thats without escrow..so with escrow its 3K probably (avg) which brings total to =6-7K for a 100K loan.
there is also maybe 6-7 other small fees for paperwork and other "junk" but those total very small in comparison to the rest..so at most one more K to the total.
jus a heads up when looking at loans...the banks will tell u ONLY the broker fee (which is 2-3K on a 100K loan).....they then till u nearer to closing that u must choose a title company (in other words pay the 1K out of pocket)...and then tell u that u have to have ur taxes and ins up to date ...so in other words they semi- trick u into thinkin CLOSING COSTS are 3K when in reality its the 6-10K the other companies mentioned.
GL if u attempt this loan with the other gentlemen
-murph/Corey