Origination charges on a conventional loan

[Alvaro Leis]

Hello I am new here and about to get our first property which is a duplex, $115k purchase price with a conventional loan, 20% down payment and interest is around 4.9%.

I received the closing disclosures from the lender which is the lender that my realtor works with, and the closing costs come to $9,800.

Origination charges are $3,971 and that is the number that Im concerned about, because we are financing 92k and they are charging more than 4% in origination charges and I have heard that the average should be between .5 and 1% is anyone familiar with this? should I get different quotes? Thanks

[Chris Mason]

Originally posted by @Larry Bowers:

Originally posted by @Eric Veronica:

@Alvaro Leis Yikes... You should see the origination points drop by about 1.5% if you increase down payment from 20% to 25%.  Even still that seems pretty high.  

Your credit score can also have a big impact on the number of points you are paying.  A borrower with a score in the 660-679 range can add 2.5% to origination charges when compared to a borrower with a 740+ credit score.  

Is that normal then to get a discount the origination fee if I am putting 25% down vs 20% on a rental property? I thought it was just the interest rate that went down with an increased down payment. I am in a situation now where I will pay 5.25% for 25% and 5.75% for 20% down. Would appreciate your insight, Eric. 

 You can always swap rate for fee or fee for rate. 25% down will have better pricing than 20% down, yes.