what is a normal upfront cost of a mortgage?

[Sebastien Hitier]

Hello BP.

The best I could get for commercial mortgage with my credit and personal profile is 5.5% 5Y ARM. I am refinancing 5 properties at LTV 60%, loan amount is $395,000. Lender is a small local bank.

The DD took forever I want to check a few things:

• I was told there was $900 document fee initially, but I was never given an estimate of the total cost of loan
• last week, 1 week before close, I asked to see the HUD, and there are 20k of cost (lawyer fees etc).

While no number except appraiser fee and lender lawyer fee is shocking to me, I feel the appraiser ($450 per property+150 rental addendum) and lender attorney fees ($5000+) are really expensive given I went with my closing company.

2 questions:

• 5% of loan upfront origination cost seems very high to me, what is the normal range for commercial?
• I thought bank needs to show estimate of costs before proceeding. Is it not the case?

any other comment welcome.

[Ryan D.]

Its not the owner of the property that determines the type of loan, is the property type. 4 units or less is residential, 5 or more is commercial. That being said, it sounds like you are using a single loan for 5 separate SFHs, is that correct? Check out Corevest - they will do this type of loan, with residential terms (30 fixed).

5.5% sounds high for a 5 year ARM. I would expect that for a 30 fixed in the current market.

$20k of fees for a single $400k loan sounds extremely high.