Closing Costs $16,500!! Can the be right? (settlement, contract, PMI, sellers)

[curiosa]

Currently at the tail end of escrow (2 months into it) & our closing costs for a $310,000 home in Los Angeles is currently around $16,500. I didn't realize it would take this long and be so much and we are not even closing yet. Just wanting to do a little survey to help gauge things since all of the mortgage/closing cost calculators online seem to give different calculations. If you could help shed light on whether this sounds correct or not that would be greatly appreciated.

Here is the break down on the GFE form

Original Loan=$310,000
Amount financed:-20%downpayment= $248,000
interest rate= 4.875

• Origination Charge=$6,458
• Charges for all other settlement services(appraisal, creditreport, title services,government recording charges, transfer taxes, Home owners insurance =$11,956.98

[rjrcm]

That seems like a pretty steep origination charge. Did you check with other lenders to compare? Suggest you also post in the mortgage forum for comments.

[George Chong]

Originally Posted by rjrcm

That seems like a pretty steep origination charge. Did you check with other lenders to compare? Suggest you also post in the mortgage forum for comments.

I agree the origination looks pretty high. Typically I see 1% for an origination fee. What did your Good Faith Estimate breakdown show? Are you buying down any points?

[Momma_bear]

Originally Posted by curiosa

Currently at the tail end of escrow (2 months into it) & our closing costs for a $310,000 home in Los Angeles is currently around $16,500. I didn't realize it would take this long and be so much and we are not even closing yet. Just wanting to do a little survey to help gauge things since all of the mortgage/closing cost calculators online seem to give different calculations. If you could help shed light on whether this sounds correct or not that would be greatly appreciated.

Here is the break down on the GFE form

Original Loan=$310,000
Amount financed:-20%downpayment= $248,000
interest rate= 4.875

• Origination Charge=$6,458
• Charges for all other settlement services(appraisal, creditreport, title services,government recording charges, transfer taxes, Home owners insurance =$11,956.98

I agree with others that the origination sounds high. Do you have details on the components of the other settlement services? $17K to close a $248 loan seems excessive to me.

[Lacerta]

Did you agree in the contract to pay some portion of the seller's closing costs?

I was going to suggest maybe you were paying upfront PMI/MIP, but you are 20% down, so that isn't it.

Are you paying points to buy down the loan?

Something is off here. I agree with the others that the origination fee is too high (I'm seeing 1%-1.25% mostly here), but also the rest of the fees are too high.

I looked back through some of our recent files (I work as unlicensed office manager in a real estate office), and we didn't have any recent closings in the $300k range, but of the many closings in the $200k range we've had this year, the highest closing costs were around $12k total, and that was with the buyer paying points, most were more in the $5k-$7k range. Extrapolating to your price range, you are not quite twice as high as you should be.

[DMenscha]

Looks like you bought down the mortgage with that interest rate. How many points did you pay?

[Silverfall]

Originally Posted by DMenscha

Looks like you bought down the mortgage with that interest rate. How many points did you pay?

In CA do buyers or sellers pay the real estate transfer tax. I'm wondering if the buyer is paying that in that 11,000 fee.

[Brandon Hoffman]

The new HUD lumps some other charges with the origination fee so it falsely inflates that # somewhat, but I agree it sounds high.

[mjd07]

I agree with the others. The origination fee is the cost of using that lender (and their processor, etc.). What is the difference in the interest rate and APY? That will show you the "cost" of the loan with that particular lender.

Edited to add: Personally, I would request a breakdown of all the charges. A lump sum does not show you what you need to know.

Best wishes,
mj

[byoak]

I agree the origination charge seems high. However the $16k all together for closing on a $300k property does not seem steep to me.