FHA Loan Closing Cost Comparison

[Anonymous]

First time home buyer - looking at an FHA loan.  We're ready to get a house, but I have some questions about closing costs.

-FICO 770's Equifax

-Preapproved for a $200k home

The home we're looking at is a $200k +/- house, which will work for us.  My question is on closing costs.  Here's the list I have from the estimate we got from our local mortgage broker on an FHA 30 year fixed:

Int Rate 4.5%

APR 5.373%

These are the fee's I've ID'd as legitimate:

City/County Tax/Stamps - $1,400

State Tax/Stamps - $683

Intangible Taxes - $389

Owner's Coverage - $1,075

Lender's Coverage - $150

Flood - $7.50

Credit Report Fee - $19

These seem questionable and/or negotiable:

Appraisal Fee - $350 (should be less?)

Tax Service Fee - $74

Processing Fee - $100

Underwritting - $449

Doc Processing - $399

Doc Handling - $25

Settlement or Closing Fee - $600

Endorsements - $200

Recording Fees - $225

Pest Inspection - $150

All together these are ~$6,296

Here are my questions:

-Does this seem high for closing costs?

-Which (if any) of these are typically handled by the seller?

-Have I correctly identified which fees are negotiable?

-How's the APR/rate look?

-Am I wasting my time shopping for other mortgages?

(note, these closing costs don't include the "prepaid" items, which include daily interest ($360), PMI (1930), homeowner's insurance premium (est. $1440), property taxes (est. $1200 for 4 months)

Thanks in advance!

[chasmith]

The questionable / negiotiable items you list are typical, and normal for a buyer to pay.  You may not do better by shopping, especially for an FHA loan.  Sometimes lenders will not charge some of those itemized fees and instead charge "points", which tend to be higher than the itemized fees.  I think that's become less and less common as the requirement to itemize fees has become stronger.

Hopefully you haven't gone to contract yet.  While these are typical buyer-paid fees, as part of your offer you could request a seller contribution to your closing costs, 3% would be perfectly acceptable for FHA and cover almost all your closing expenses.

[Anonymous]

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@chasmith wrote:

Hopefully you haven't gone to contract yet.  While these are typical buyer-paid fees, as part of your offer you could request a seller contribution to your closing costs, 3% would be perfectly acceptable for FHA and cover almost all your closing expenses.

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^^ What he said here....

We got our seller to pay 3k on CC and thats pretty much all the actual closing costs, not counting the credits needed paid for homeowners insurance, property taxes, etc.

[Anonymous]

They all look standard to me.  Perhaps the closing fee is a bit high.  Your appraisal fee is actually very reasonable. (Mine was $475)

Depending on your local market, I would definitely ask for closing costs from the seller. On an FHA, you can request up to 3% in closing costs from the seller.

A couple other things to consider - the mortgage insurance on an FHA is pricey, currenlty 1.15%.  On a $200K loan, that amounts to about $180/month on top of the principle, interest, taxes and home insurance. And you have to pay it for 5 years minimum.

With your score (assuming it is a true FICO score and your other two scores are close to it), you ought to consider a conventional loan.  Many lenders have conv loans with a low downpayment of 5%.  Then, your mortgage insurance should be somewhere around 0.5 to 0.6%; that's a substantial savings.

FHA rates and conventional rates are really pretty close right now.  Maybe 0.125 difference in my area. 

[ShanetheMortgageMan]

Looks pretty good for an FHA loan as well - with your scores, like DrW mentioned, you should look into conventional for comparison... the PMI is much less.