Investor · Philadelphia, PA · Member since 2013 · 348 posts · 111 votes
Here is a scan of my closing costs.
I know a lot of those are legit, but the settlement charge seems really high, and also the survey. And the Document preparation fee, seems BS. I am already paying for real estate agent and mortgage broker, isn't it their job?
I know a lot of those are legit, but the settlement charge seems really high, and also the survey. And the Document preparation fee, seems BS. I am already paying for real estate agent and mortgage broker, isn't it their job?
They look pretty legit to me. When a mortgage lender puts one "origination charge" fee, people ***** and want to know what they are paying for. But here when they break it down (underwriting fee, doc prep fee, admin fee) people get upset too.
You have the right to shop and pick the surveyor of your choice so if you think that is high that is on you to get another surveyor. I am in Florida and normally pay around $300 for a survey but in your locale $500 could be the going rate. Obviously the price is going to vary based on the size of the lot. Lastly, as for the settlement fee, here in Florida as it pertains to title insurance jts nornally seller picks and seller pays so if you are the buyer and my title company is setting the fee.
Investor · Madison, CT · Member since 2014 · 710 posts · 458 votes
11y
They definitely got you from every angle. How did you pay for the mortgage broker? Usually their fee is in a line (or in your case, it looks like 4 lines) of the closing document. I am not familiar with the pest inspection or survey fee; those have never showed up for me. However, if those two lines are for an inspection of the property performed by someone for the bank, then the costs seem right. Did you pay an inspector as well?
I know a lot of those are legit, but the settlement charge seems really high, and also the survey. And the Document preparation fee, seems BS. I am already paying for real estate agent and mortgage broker, isn't it their job?
They look pretty legit to me. When a mortgage lender puts one "origination charge" fee, people ***** and want to know what they are paying for. But here when they break it down (underwriting fee, doc prep fee, admin fee) people get upset too.
You have the right to shop and pick the surveyor of your choice so if you think that is high that is on you to get another surveyor. I am in Florida and normally pay around $300 for a survey but in your locale $500 could be the going rate. Obviously the price is going to vary based on the size of the lot. Lastly, as for the settlement fee, here in Florida as it pertains to title insurance jts nornally seller picks and seller pays so if you are the buyer and my title company is setting the fee.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
11y
Document prep fee is to pay for creating those pieces of paper (AKA mortgage) that get recorded.
This looks like a GFE, so some of the numbers could come in lower too.
The ones that caught my eye here are transfer taxes and city/county stamps and state stamps. The city/county stamps and state stamps are supposedly to pay those transfer taxes. What municipality, school district and county is the property in? And what is the purchase price? With that we can check into the transfer tax amounts due to each of those pieces of gov't. The transfer tax line item could just be how they are handling the school district's share.
I know a lot of those are legit, but the settlement charge seems really high, and also the survey. And the Document preparation fee, seems BS. I am already paying for real estate agent and mortgage broker, isn't it their job?
In Florida it is rare for a buyer to pay the buyers agent. You can shop for a survey company. The title company usually orders the survey from the company they routinely work with. Talk to the title agent if you wish to use a different survey company.
The document prep fee is the cost for generating the mortgage documents both for your closing and for selling into the secondary market. Sometimes the lender does this in-house sometimes they outsource it to a 3rd party document prep company.
The settlement fee is usually split between parties but this is dictated by the wording in your purchase contract which the settlement agent will follow when preparing the preliminary closing diclosure/HUD.
BTW this looks like an initial disclosure with estimated numbers. You mortgage broker only knows the lenders costs until he gets actual numbers from the closing agent.
I would ask the lender if the survey is really necessary. Often it is not or can be drawn from an earlier sale, which would make it less costly.
The survey is usually required by the title company rather than the lender. And they will usually waive that requirement if it is a long settled area with no new development. But when they require it, it is usually for a reason and not one you want to bypass. You don't want to end up purchasing a property with encroachment issues.
Real Estate Investor · San Diego, CA · Member since 2015 · 6 posts · 0 votes
11y
Call your escrow company or whoever closes your deal, go over every cost, if they can't answer it, ask them if they could leave that charge in escrow until you are explained what it is.
I had a $4,000 cost once, I questioned it no-one could explain it to me. I asked the escrow agent to close the deal but leave the $4,000 in escrow until what I knew what it was for.
A couple of weeks later I called escrow and asked again about the $4,000 charge, they said they called the closing loan company and they didn't return the call.
I asked them to send me the money, if their were any further questions the loan company can contaact me directly, I never heard from anyone again.
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
- All the taxes (whatever they are called) will be whatever they will be, and no one is allowed to turn that into a profit center by over-charging, or there's millions of dollars of fines.
- Until/unless you are in contract, the title/escrow/settlement fees are very carefully calculated wild *** guesses at this point. Title/escrow/settlement fees, in my area at least, vary up/down by as much as 30% for the exact same services. Often the more expensive ones have sales ladies with deep cut tops and tight skirts. I quote high so people don't feel bait and switched when one of the sexy sales ladies lands an escrow due to effective flirting with a listing agent. (We're a little more price sensitive on the lending side, so we brag among ourselves about how our go-to escrow gal looks/acts/etc like an old librarian.)
- Appraisal fee, the lender also isn't allowed to make money on or there's millions of dollars in fines. A company I'm familiar with got sued by CFPB because they weren't correctly refunding the $15 and $25 here and there of over-charges, it was in the millions.
- Total origination charges I see here are $970.25. The other ~$5k or so, you need to find someone else to yell at besides your lender. :P