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Thanks for the replies. I wanted to know if on VA loan closing costs you can be charged an origination fee AND the underwriting/processing escrow fee etc?
Whoa, I see all these fees flying over the place, but suspect only part of the story is being told. $5400 for a lock in fee is rather high, unless it's for a long-term lock or has a float down feature. Lock in fees are paid prior to loan closing and are credited towards the closing costs at the closing table. They are also refunded if the loan is declined. There is no way a typical lock can have that high of a lock in fee........chances are, you are referring to lender closing costs or even total closing costs......completely different things. Also, there is a funding fee on the estimate......that is usually financed, unless paid in cash.
To the OP, didn't your Realtor make sure you were put in front of a loan officer before you made an offer? If so, you need to fire that lender, and find another. Now. NO ONE IS LOOKING OUT FOR YOUR INTERESTS, HERE. It's the lender's responsibility during a prequalification that you understand the closing costs and payment before you enter into a purchase contract. It's also the agent's duty, as well. If you were unaware that there would be additional closing costs in addition to the Loan Origination, shame on everyone involved.
SmartMoney thanks a lot for the information.
Actually, I just got my buyer estimated closing statement on Thurdays and Friday is suppose to be the closing day. My total closing cost is around $11,670. Before Thursday, no one told us there is around $5,400 interest lock-in fee charges. The $11,670.91 inludes following break down:
Prorations/adjustment (such as prepaid county tax 3/10 to 7/1 and HOA): $1,640.21
Title Charges ( such as 100-restrictions, endorsement fee, recording deed and recording trust deed): $640
Escrow Charges (Abstract fee): $720
New Loan Charges - our lender
Origination Fee (Closing officer doesn't know what is that and lender explain it is purely interest lock-in fee, they don't charge origination fee, doc processing fee, underwriting fee...) $5,362.50
Appraisal Fee : $575
Credit Report: $20
Flood Certificate: $15.5
Insterest per day from 3/10/2010 to 4/1/2010: $994.52
County Taxes for 3 month deposit at our lender: $1,198.23 (this is another thing I questioned my lender why we need to deposit extra in our lender for three month since we will prepay our county tax from 3/10 - 7/1)
HOA fees for April: $232
Miscellaneous:
EOI direct for insurance: $72.95
Padding for title/Escrow: $200
Total Clsoing cost: 11,670.90
My husband is a VA with disability so we are excluded from VA funding fee. Per the VA lenders handbook, even they charge a flat fee which should not be exceeded 1% of my loan. When we ask for interest rate lock-in, we signed a good faith estimate and in the package it includes a lock-in interest rate agreement which said we might need to pay a lock in interest rate fee. But no estimated costs were stated on the agreement or on the good faith statement. Our loan office told us the lock-in interest rate is only good for 30 days.
No one sits down to help us understand the closing cost before prequalification, not even a explanation package since our lender is out of state. My sales agent doesn't understand VA loan that much, per his estimation the closing cost should be around $3,000 before make the offer.
Additionally, we extended our contract with seller bank 3 times to wait for VA approval. Very frustrated home purchasing experience.
Fax your gfe to this lenders competition.... get a counter offer and you will see how much fluff is there.
looks high to me.... but i didnt see a mention of rate.
rate and fee go hand in hand.
Fax your gfe to this lenders competition.... get a counter offer and you will see how much fluff is there.
looks high to me.... but i didnt see a mention of rate.
rate and fee go hand in hand.
The thing is we are OK with the GFE but the buyer estimated closing statement is very different from what stated in GFE. GFE charged much less.
I think I know where the screw up is.....what's your rate and loan amount? (without knowing your loan amount, $5400 could be 1 point or 3 points).
For the purposes of this explanation, Origination Fee, Lock Fee, Points, Discount Fee are all the same thing
When you lock in, you usually have various options, such as:
5.00% 0 points
4.75% 1 point
4.50% 2 points
When you initially started your discussion with your lender, you most likely discussed "0" points, but when it was time to lock in, the loan officer didn't explain "points" (or whatever the labeled fee) and you chose the lower rate. I am betting the points were mentioned, but not explained.
Now, you can call the lender back (quickly, and in now or 1st thing in the morning) as ask for a higher rate w/ less fees. It may move your closing date, but it can be done. Most lenders let you move within the pricing grid for the day you locked in.
This completely sounds like a communication screw up, the lender assuming you understood the transaction. When you are working FOREVER on a purchase and it's months, it's not easy to keep track of a converation you had with the lender 4 months ago.
Out of curiousity, how did you select your loan officer?
Ya, Smartmoney, that's exacly what happened. Our lender didn't mention that, to lock-in the interest rate, we have to buy points and everything was on phone no written contract at all. The lender call this discount fees. Our GFE stated discount fees around $1,600 orginally but it shows $5,400 on the buyer estimated statement. The loan officer was claiming the numbers on GFE were not well updated.
We were asking to lock our rate at 5% in Feb (is the 5% below the market rate? I as told buying points is to make your interest rate below the market) and my loan amount is $330,000. I believe our lender probably will give us higher than 5.25% if we want to remove the discount fees.
We found the lender from zillow, it is called ifreedomDirect.
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VA Loan
