topic Please Review this GFE in Mortgage Loans

Please Review this GFE

Anonymous — Fri, 02 Oct 2009 01:06:26 GMT

So I went to Bank of America for a 3/1 VA Hybrid ARM loan, as i only plan to live in house for 3 years, and i got this estimate.

Purchase Price - 120,000

VA funding fee - 2.1%

Loa Amount - 122,580

Initial Interest rate - 4.2%

Max Increase - 1%

Lifetime Max Cap - 5%

P& I - 603

Taxes- 242

Insurance - 50

payment total 895

Discount fee - $ 306

Appraisal - 445

flood cert - 11

other lender/broker fee - 35

TOTAL Lender fee = 797

Lenders Title insurance - $250

Recording Fee - 40

Survey fee - Free from the bank as said in the contract, its a bank owned, foreclosure

Credit report - free as above in contract

TOTAL /settlement/charger = 290

TOTAL Prepaid - 1660

( 20day interest + Insurance + tax reserve )

downpayment - 0 ( VA loan )

Total closing cost - 797 + 290 + 1660 = 2747

Bank is offering 2950 in closing costs as in contract.

So, is this GFE too good to be true ?

Charges in my GFE that are ZERO are application fee, processing fee, attorney fee, escrow settlement fee, and Origination fee ( he said BoA dont charge orignation fee, they get their money from orig. points )

please shed light.

thanks!

Re: Please Review this GFE

ShanetheMortgageMan — Fri, 02 Oct 2009 13:58:01 GMT

Since you are only going to live there for 3 years, what is your exit plan at that time? What state are you buying in?

It's a pretty fair deal, interest rates on 3/1 ARMs are actually the same or slightly worse than a 5/1 ARM, I'd ask the LO to compare. Other than the doublespeak by the LO (origination fee & origination points are the same thing), for a 3/1 ARM (and a 5/1 ARM) for a VA loan it's a solid deal.

Re: Please Review this GFE

Anonymous — Fri, 02 Oct 2009 14:56:42 GMT

Thanks for the input. My exit plan is to sell the home after 3 years, i am in the military so i move every couple yeas, so i was only looking for a foreclosed property or short sale, This should appriase over $ 145K and i got it for 119K offer accepted. I might try 5/1 if rates are better. I am in TX.

thanks

Re: Please Review this GFE

ShanetheMortgageMan — Fri, 02 Oct 2009 16:20:53 GMT

Gotcha.... just keep a backup option in mind in case values are where you couldn't sell without having to bring in your own funds.

Re: Please Review this GFE

kai_1103 — Fri, 02 Oct 2009 17:20:29 GMT

Many agree inflation is going to rise, and interest rates along with it. Make SURE you will without a doubt sell it in 3 years.

My personal opinion is rates are going to shoot up, think 1978, but hopefully not as bad. I couldn't sleep at night with an ARM! Just make sure the risk is worth it.