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NFCU Mortgage Pre Approval - Closing Cost

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
New Member

NFCU Mortgage Pre Approval - Closing Cost

Greetings, I am a long time lurker and just got pre approved for a mortgage, here is my story and my numbers.

 

MyFico scores: EQ:776, TU:759, EX:770

 

Scores according to lender: 773, 753, 759

 

Greetings, I am a long time lurker and just got pre approved for a mortgage, here is my story and my numbers.

 

MyFico scores: EQ:776, TU:759, EX:770

 

Scores according to lender: 773, 753, 759

 

I am a first time home buyer ready to start looking for a home. The lender stated the rate is a bit on the high side to give room for market fluctuations. They stated I am unable to lock in a rate without a sales contract.

 

Please take a look and share your thoughts.

 

 

 

Home Buyers Choice -

 

Purchase price: 185K

Loan amount: 188,237 @ 5.125% (not locked)

HBC Funding fee: 1.75%

 

 

Closing Cost Estimate: $11,642.25 Smiley Surprised

 

Lender Fees

 

Appraisal fee: $515.00

Credit report fee: $14.45

Tax service fee: $45.00

Flood determination fee: $7.00

Tax set-up fee: $5.00

NFCU funding fee (NFCU%): $3237.00

TX Attorney review fee: $125.00

 

Required By Lender To Be Paid In Advance

 

Pre-paid interest: $792.92

Hazard Insur. premium: $1505.90

 

Reserve with Lender

 

1002  2mos Hazard insurance: $250.98

1005  2mos county property tax: $857.16

 

Title Settlement Charges

 

Title-settlement fee: $350.00

Title-owners premium (optional): $1346.30

Title-lenders coverage premium: $1506.54

Title-survey fee: $500.00

Title T-36 Envir. protection lien: $30.00

T19 survey coverage: $30.00

T30 tax deletion: $30.00

 

GoT19nemnt Fees and Charges

 

Government for deed $ 203.00

 

Additional Settlement Charges

 

Pest Inspection fee $100.00

TX guaranty fee- purchase $ 6.00

 

Total estimate without escrow $ 10,534.11

Escrow total $ 1,108.14

Total estimate cost with escrow  $11,642.25

 

I was not expecting such a high closing cost. I would love to hear your thoughts. Thank you.

 

 

7 REPLIES 7
Frequent Contributor

Re: NFCU Mortgage Pre Approval - Closing Cost

Ok, couple of problems I see here that will lower the costs - 

 

Purchase price: 185K

Loan amount: 188,237 @ 5.125% (not locked) <--- you already added the funding fee here, why is it also in your closing costs?

HBC Funding fee: 1.75%

 

Lender Fees

 

Appraisal fee: $515.00 <--- I am nitpicking here, but my appraisal with NFCU was less, may be your area but look into this

Credit report fee: $14.45

Tax service fee: $45.00

Flood determination fee: $7.00

Tax set-up fee: $5.00

NFCU funding fee (NFCU%): $3237.00 <--- this is double dipping, either it is financed for the rate hike or not

TX Attorney review fee: $125.00

 

Required By Lender To Be Paid In Advance

 

Pre-paid interest: $792.92

Hazard Insur. premium: $1505.90 <---- this is high, are you in a flood zone? I went with ASI/Progressive in Texas and pay half that on a house values twice yours

 

Reserve with Lender

 

1002  2mos Hazard insurance: $250.98 <---- again, this is high, shop around

1005  2mos county property tax: $857.16

 

 

Total estimate without escrow $ 10,534.11

Escrow total $ 1,108.14

Total estimate cost with escrow  $11,642.25 <--- this should be closer to $6000

 

My Cards: NFCU Cash Rewards 4.6k; Ashley Furniture 7k; Lowes 2.45k; Home Furnishings 2k; Amazon 1.5k, Guitar Center 1.5k; Discover It 2k; Local CU 1k; CapOne Quicksilver Platinum 1.3k; CreditOne Platinum 900; Sears Citi 5.75k; Total 30k credit. 2 TMCC Auto loans @ 5.09%; and a mortgage!
Message 2 of 8
New Member

Re: NFCU Mortgage Pre Approval - Closing Cost

Thank you so much for the input. I live in coastal area some properties are considered flood zone. I’m not sure why they have the fee rolled into the mortgage and also apart of closing. I will look into this.

Message 3 of 8
New Contributor

Re: NFCU Mortgage Pre Approval - Closing Cost

The property being in a coastal area may not only have to consider flood zone (and possible flood policy), but also TWIA (Texas Windstorm). The coasts of Texas are considered Tier I or Tier II. If you require TWIA coverage, it's not cheap. The lender may have done a prelimentary flood zone determination and this could be reason behind the sticker shock of the homeowner's insurance estimate. You should shop around for insurance, but if TWIA is required, the rates are set by the state.

 

[Source: I'm a former insurance agent]

Starting 12/27/16 FICO Score 8 EQ 645 TU 643 EX 618
Current 6/27/17 FICO Score 8 EQ 797 TU 804 EX 782


Goal 740+ ACHIEVED 4/5/17 FICO Score 8 EQ 776 TU 762 EX 748
Message 4 of 8
Valued Member

Re: NFCU Mortgage Pre Approval - Closing Cost

Hi there,

To clarify a few of your items in your original post:

1. The 1.75 funding fee is not rolled into your rate unless you specifically requested it. That fee you can pay now, or roll into your loan.

2. 250/month is navy's standard assumption for fire insurance. I wouldn't worry about it, you are allowed to shop for your own insurance afterall.

3. I paid 100 dollars more than you did for my appraisal, the appraisal fee is determined in part by the square footage of the home I was told.

4. At least in California, it is not uncommon for seller to pay for buyer's title insurance.

5. I don't see an origination fee in there, I would double check to make sure they didn't miss that. If it is required they will figure it out eventually

Let us know if you have any other questions!
Message 5 of 8
New Member

Re: NFCU Mortgage Pre Approval - Closing Cost

Thanks for the info. Your right the origination fee is not on there, I will look into it. Surely its required.

Message 6 of 8
Moderator Emerita

Re: NFCU Mortgage Pre Approval - Closing Cost

The biggest item is this:  you don't have a property selected yet so the lender had to give you rough estimates and many LO's will estimate a little high until you actually get a property selected and under contract.

 

The HO insurance is part of your closing costs AND part of the escrow costs.  You do have to pay in advance 12 months for your insurance + 2 months insurance escrow so the next time the insurance is due the payment will be made out of your escrow account approx 60 days in advance. This is normal. The actual insurance amount can't be determined until you have a specific property. You can shop your quotes. You choose your insurance agent/company. The lender doesn't choose the insurance vendor at all.

 

Title insurance is a negotiable item in the contract. In my county, it is typical for sellers to pay for an Owners Title Policy and the buyer to pay for the simultaneous issue policy that covers the lender. But the counties to the north and south of me have the buyers pay.  Talk to your Realtor about negotiating this item. 

 

Usually, sellers pay doc stamps on the deed and not buyers so that cost should be removed.

 

Once a property is selected, the LO can give you better estimates. 

 

Do you have funds for closing costs and pre-paid expenses?  If so, check into a different loan with a lower rate. If not, see if you the seller will contribute toward your closing costs (not always possible in a sellers market). It is a lot less expensive than getting that loan where you are paying a much higher than market rate, 

 

 

Message 7 of 8
Frequent Contributor

Re: NFCU Mortgage Pre Approval - Closing Cost

There are variable items such as insurance - if you live in a flood zone, etc. the rates going to be high. It sucks, but yes, you do have to pay for a year in advance, as well as what is remaining on the year when you close. After that, the amount is typically escrowed in your monthly payment. The 1.75% fee is definitely either going to be paid in closing costs, or financed for a premium rate. Your LO should be able to work with you on that. 

 

As far as the title fees, my Loan Estimate from Navy (and the other lender who I closed with) had roughly the same figures, but when I actually closed the title insurance went down. Example of what my closing costs would have been with Navy - 

 

Navy - Estimated Closing Costs - 18,083 (included financed costs)

Estimated Cash to Close - 10,482

 

NFCU Funding Fee - 6,101

Origination Fee - 3,547

Lenders Title - 1,129

Owners Title - 2,254

Interest 5.125% (increased to 5.825% later on due to financing the funding fee etc., yuck)

 

Payments 2,675 monthly (yuck again)

 

As you can see, some of that was financed, so while it is closing costs technically, it is not included in the cash to close. So, here's what happened with the new lender - 

 

Lenders title policy - 2,284

Owners title policy - 229

NO FUNDING FEE

NO ORIGINATION FEE

 

Cash to close - 11,445 (3.5% FHA down payment)

Total closing costs including escrow - 14,245.64 (including mortgage insurance premiums)

 

Payments 1,955 monthly

Interest 4.125% (we had lender pay closing costs for a premium, would have been 3.125%)

 

In conclusion, the down payment was worth it. We paid a little more down, and lowered our payments by 720 monthly. That is HUGE! Run away, away from HBC if you are only using it for the lower down payment. 

My Cards: NFCU Cash Rewards 4.6k; Ashley Furniture 7k; Lowes 2.45k; Home Furnishings 2k; Amazon 1.5k, Guitar Center 1.5k; Discover It 2k; Local CU 1k; CapOne Quicksilver Platinum 1.3k; CreditOne Platinum 900; Sears Citi 5.75k; Total 30k credit. 2 TMCC Auto loans @ 5.09%; and a mortgage!
Message 8 of 8