Closing costs

[Jefferson Zettel]

I'm a first time non investment Home buyer (in Las Vegas) and am having some trouble to Understand these fees They seem much higher than previously expected.
I'm under contract on a house purchase price is 173,100 with 25% down
Does that sound right to You?

ORIGINATION FEE (FPF) $3,894.75
ADMINISTRATION FEE $827.00
PROCESSING FEE (FPF) $675.00
Daily interest charges from 08/01/12 to 09/01/12 31 @ $14.88 / day $461.28
Settlement or closing fee $600.00
TITLE MISC. FEES to $100.00
Total Prepaid Finance Charge $6,558.03
Amount Paid on Your Account/Amount Paid to Others on Your Behalf
Paid by S* Seller L* Lender K* Broker R* Branch O* Other
Paid Outside
of Closing
Amount Paid
By Others
Other Charges
Paid By Borrower
Appraisal fee to $425.00
Credit report to $19.00
PREMIUM FOR 3RD PARTY/LEN to $-3,063.87
Homeowner's insurance for years to $420.00
Homeowner's Insurance 2 months @ $35.00 per month $70.00
Property Taxes 6 months @ $106.43 per month $638.58
Aggregate Adjustment
Owner's title insurance $1,500.00
Lender's title insurance $550.00
Deed $ Mortgage $ Releases $ $125.00
STATE TRANSFER TAX FEE to $982.81

Purchase Price (+) $173,100.00
Settlement Charges to Borrower (+) $8,224.55
+ $181,324.55
Amounts Paid By/For Borrower
Principal Amount of New Loan(s) (-) $129,825.00
-$129,825.00
Total Cash From Borrower $51,499.55

Loan Amount: $129,825.00
Prepaid Finance Charge - $6,558.03
Amount Financed: $123,266.97

I am somewhat tied to this lender as He's the only one that I found that would accept only the last year income tax and having opened my Business a little over 2 years ago 2010 tax return would hurt the average pretty bad.

Also I didn't like the fact that He pre-qual me for 20% down 3 months ago and now He says I need 25$ with no significant financial status change

I'd be on a stretch do this deal and am considering waiting til next year when conditions would be more favorable for financing but I have no idea how the market Will be in Vegas.

Let me your thoughts.

[Daniel Doran]

Jefferson,

The closing costs are high solely because the lender is charging you a hefty origination fee of almost $4k while also getting $3k on the backend of the deal from the wholesale lender buying the loan. In addition the administration fee and processing fees are "junk fees" they tack on so in essence this lender is charging you almost $8,500 to do this loan. That is extremely high but he knows he has you over a barrel. As you said yourself, you can't go anywhere else because no one you've found has a program that works for you.

The rest of the fees seem in line with what to expect. The title company is charging you $700 to close the loan. The rest of the fees are escrows and pre-paid interest that covers you until your first mortgage payment is due. Think of it as a partial mortgage payment you make at closing for the remaining days in that month.

I don't know what the contract states or what the standard procedures are for Las Vegas but in Florida the seller would normally pay the $1,500 for Owner's title insurance and you would pay the Lender's title insurance. $550 is high for that fee as well. If you contact the title company and tell them you want a discount on that and make enough noise they will normally bend. (It's been done to me enough times as a title agent on fees much less than that.)

But I would approach the mortgage broker first and tell him you think the origination fee is out of line since he's also getting $3k on the backend and you want him to lower it. All he can do is say no and all you can do is then threaten to pull the loan from him. Comes down to who blinks first.

Good luck!