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I'm in the process of purchasing a condo and my mortgage situation is totally screwed up! The closing was originally supposed to be on Oct 16, but they (the mtg co.) needed an extension. So we got an extension to Oct 30. Last week I find out that the co. I'm using goes out of business, but the owner of the co. already has another co. up and started and that's where all my info will be transferred to and that's where it'll be processed. So I need to sign all these papers AGAIN and get them faxed over to the mtg co., so I give them to my Realtor to fax to the mtg co.. They call me a few days later saying they never recieved the paperwork and that's where I stand right now.
I know nothing of what's going on.
I have no rate locked in.
I don't know what my payments are going to look like.
And another thing...the purchase price is $87,700 (it's one bed, 809sq ft)with $2700 back towards closing costs. Even WITH that concession, they still estimate my closing costs to be around $8,000!! Does this sound right? I'm going FHA btw. Do estimates tend to run high? I thought closing costs were supposed to be around 3% of purchase price.
they still estimate my closing costs to be around $8,000!! Does this sound right? I'm going FHA btw
I did an FHA loan (complicated 203k rehab). My closing costs were high for a purchase price more than double of yours... but the closing costs were below $8000. You pay through the nose for the "upfront PMI" - but $8000? That sounds ridiculous. Get out of that deal, let the condo fall through - take the hit on your earnest money if you have to. Losing 50-100% of your deposit sounds like a drop in the bucket vs what sounds like some kind of scam.
Are you sure the closing costs are $8000? You might be looking at total settlement costs which include setting up your escrow account for taxes and insurance. When buying you have to pay 1 years insurance up front and 2 months worth into escrow. Additionally, you are probably buying with a FHA loan which includes a 1.75% upfront fee which on your loan amount would be around $1500.
Please put the good faith on here so you can get some good advice.
but i would agree, you should move on to a new lender.
FHA closing runs more than conventional because of the 1.75% that Victor pointed out.... the rest should not have that big an effect on the $$$....
Even if you are obligated for some reason to not ditch the current lender, check if you can go to a different, reputed lender/broker at the same time. I don't know how FHA works, but if you can do it then you will have multiple choices. The rates have stuck in neutral gear for sometime, but with everyone scared about the dollar depreciating, the rates might go up a bit in the near future.....
Sounds like you are working with a really weak lender. I agree with the others...run. Go see a reputable lender that won't be closing up shop in the next week. BIG red flag that they closed one shop and immediately opened another. What are they running from???
Good afternoon, the closing costs do sound high for your scenario. I agree with Victor, I would like to see the good faith estimate showing the breakdown of where every dollar is going. Most FHA mortgage lenders limit the fees charged by a broker, so chances are your looking at the total settlement charges but it does seem a bit excessive for a $80,000.00 loan.
I also wanted to point out that changing FHA lenders is not as easy as just calling someone else. The current broker you're working with must release the FHA case number to the new mortgage company in order to submit the new loan to underwriting. This could be a quick process, however if the current broker creates challenges with handling the release there is a quick way to resolve the issue. You can write a letter stating that you no longer wish to pursue a loan with them and as long as your new lender is FHA certified they can submit that letter to HUD and complete the case number transfer.
I'm curious, have you done the appraisal yet? We are in a very volutile market right now so the fact that your rate is not locked in, and there is no actual loan approval yet is scary. Good news is that mortgage rates are still low, and good FHA mortgage companies can get the loan done in 2-3 weeks. Contact your Realtor an find out if you can get another extension to give you a little time to find a new mortgage company that will keep your best interest in mind.
Good luck!
Last edited by Josh Harmatz; 10-23-2009 at 02:02 PM..
I also wanted to point out that changing FHA lenders is not as easy as just calling someone else. The current broker you're working with must release the FHA case number to the new mortgage company in order to submit the new loan to underwriting. This could be a quick process, however if the current broker creates challenges with handling the release there is a quick way to resolve the issue. You can write a letter stating that you no longer wish to pursue a loan with them and as long as your new lender is FHA certified they can submit that letter to HUD and complete the case number transfer.
Ok, this might be what I was talking about.... I did not know this when I did my loan, but I did hear from someone that there were some formalities.... I just did not know that this was the issue....
So Josh, essentially what you are saying is that you cannot have 2 simultaneous FHA commitments one from lender A and the other from lender B right ?
ok so looking more closely, I see that the "estimated closing costs" are $4108.78, and "estimated prepaids/reserves are $2755.50. And so the total "settlement charges" are $6864.28, and then you add in the $2700 seller concession and that's $9564.28! Does this make sense? Or maybe the concession will be taken from the $6864...
the appraisal was done already and it was appraised at $104,000 so it's above my purchase price.
does this clear anything up I hope?! I would really rather not go through this whole process again!
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