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Hi all,
I'm a first time homebuyer purchasing a ~$55k mortgage in Georgia with 3.5% down through FHA.
I'll list my closing costs below, which for the most part seem reasonable, but mainly I'm being thrown by a $1,275 title settlement fee charge included...whoa! I'm told I can shop around for that - what approach do you all recommend for getting a reasonable rate? Should I just call closing attorneys and ask? What is a fair rate for a ~$55k mortgage?
(And if anything else looks unreasonable in this list, will one of you tell me? Please and thanks!)
-----------------------
A. Origination Charges
(no points)
$500 processing fee
$795 underwriting fee
B. Services You Can't Shop For
$500 appraisal fee
$50 credit report
$16 flood cert
$927 MIP
C. Services You Can Shop For
$200 Lender's title insurance
$1,275 title settlement fee (OUCH!)
D. Total loan costs (sum of all above) - $4263
Other costs:
E. Taxes & other govt fees
$68 recording fees & other taxes
$217 transfer taxes
F. Prepaids
$720 ins prem (actual will be $509. Nice!)
$150 prepaid interest
G. Initial escrow payment at closing
$180 homeowner's ins (wait...I'm paying for a year (see above), and now another 3 months?)
$372 property taxes
H. Other
$248 title ins
I. Total other costs - $1,955
J. Total closing costs - $5,005 ($6218 minus $1213 lender credit)
Cash to close...$3,353
($5005 closing costs - $927 (financed) + 1922 down payment - 1000 deposit - 1647 seller credits)
They don't look too bad. Most things look ok. The Title Settlement fee seems quite high. You can definitely shop that around. Call local title companies and show them your LE and see if then can beat it by $500.
I've sent out about 100 Loan Estimates in the past year, and none of them show >$1,000 for Title Settlement (but none of my loans originated in GA).
I am also in an area where the seller pays owners title, but they do not pay the lenders title or endorsements. Title companies vary all over the board with the pricing of settlement fees and other junk fees. The settlement fees on the same purchase can be as low as $400 up to double or triple the amount in my area for the same purchase.
When you are calling around, you will want to make sure that the title company is providing to you the entire expense - not just the settlement fee. Have the title co show you, in writing, what fees you are responsible for paying per your contract. You should be able to get that quote easily and quickly. If the title co won't give it to you in writing - run away.
Also, I have noticed that some lenders price the settlement fee high on the LE so they don't underestimate your LE expenses. There are penalties to the lender if the lender underestimates so some will put in a very large settlement fee. This you will need to discuss directly with the LO. Before you do discuss it with the LO, contact the title co and have your exact expenses in front of you.