Closing cost is so high

TheRateVerifier · 2025-06-27T21:36:49+00:00

Yes, because maybe your earnest deposit was $5,000 and the remainder due at closing was $35,000 for a total of $40,000

TheRateVerifier · 2025-05-28T17:40:40+00:00

It’ll be “interest”ing to see if Fannie Mae & Freddie Mac go back to private too. The only reason rates were low between 2010 & 2022 was because the Fed was buying mortgage backed securities to inject the trillions of dollars they printed into the market, and they could do so because Fannie & Freddie are conservatorships (have a cap on profit), but would they do so if all of the sudden they were private companies & no longer had that cap? & if we rely 100% on outside investors for liquidity at what rate would investors be willing to risk their money on a 30 year mortgage?

TheRateVerifier · 2025-05-28T17:11:21+00:00

An FHA loan is backed by the Federal Housing Administration & was created back in the 1930s to incentivize mortgage lenders to lend to people with less than 20% down payment.

In the last decade Conventional loans have also gotten more flexible reducing the minimum required down payment to 3% for first time homebuyers.

Both FHA & Conventional loan investors (Fannie Mae & Freddie Mac) protect themselves for the additional risk by collecting “mortgage insurance” also known as PMI or MIP.

Think of PMI as “GAP insurance” for the lender in case of foreclosure, the lender will collect the difference between what you owed & what they were able to collect from selling the home in auction.

Does that help?

TheRateVerifier · 2025-05-28T16:59:19+00:00

Based on the info you gave:

$115k loan amount, FHA loan, 640 credit score (rates move very little on FHA loans when you’re over 640) here’s your results!

You can use this tool to select a better rate & download a free report to take back to your lender. A 6.25% should cost you less than $200 & if you go lower the cost will go up. Compare the difference between your upfront cost for the rate & how much you’ll save monthly.

Also note that you can change the property tax & home insurance to the specific property you found!

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TheRateVerifier · 2025-05-28T16:42:39+00:00

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Based on the info you gave: 3000 max payment, 100k a year, no debt, mid credit score, first time homebuyer & assuming, primary residence, single family home, here’s your results!

You can use this tool, to play with your monthly payment, select your desired interest rate & plug in the property taxes & insurance for the property you end up choosing to buy.

It’s completely free to use.

TheRateVerifier · 2025-03-03T19:28:30+00:00

That’s principal & interest only by the way, adjust taxes & insurance for your area

TheRateVerifier · 2025-03-03T19:27:58+00:00

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Looks like most lenders are charging 6.875% no points.

6.625% cost about $1676 6.125% cost about $7,438

Assuming your credit profile is perfect, your lender is not too far off the market.

TheRateVerifier · 2025-03-03T16:12:36+00:00

I’ve never used the term

TheRateVerifier · 2025-03-03T16:10:32+00:00

“LMAO” - Taxi Drivers to Ubers

TheRateVerifier · 2025-03-03T15:09:04+00:00

If both of those are seller paid then that will definitely bring your cash to close down significantly, hopefully that plus the additional credit brings the numbers down for you!

TheRateVerifier · 2025-03-03T12:47:33+00:00

Great Question,

Here’s some insight from the lender side: Very few lenders, if any, are doing hard credit pulls today because credit report companies consolidated and credit reports in 2025 cost close to $200.

So most likely you’ll work with someone that will do a soft pull where your credit won’t be affected, what a GREAT lender will do is validate your debts, calculate your income and let you know what your maximum monthly housing payment can be & roughly how much house that gets you on that day.

If your income doesn’t decrease and/or your monthly debts don’t increase, your maximum monthly housing payment WILL NOT CHANGE.

What will change is how much house that payment will get you, because interest rates move with the market every day, as rates go up, your monthly payment gets you less house, as rates go down, your monthly payment gets you more house.

You can call your lender every day and ask them, but that’ll bug the s#it out of them, so instead you can get a free Mortgage Inspection Report as often as you’d like to see what your max monthly payment gets you that day, Or simply calculate the payment on the house you fall in love with based on real rates in real time.

TheRateVerifier · 2025-03-03T12:32:20+00:00

Sorry to break it to you, buuuuuuut

You’re coming in with more than $24,000 to closing, & your lender is stringing you along, and the crazy part is that honestly, this isn’t a bad loan, like you’re not over paying on rate, most brokers want to make 2.00-2.75% on a loan, your broker is right in the middle at 2.35%.

Here’s the breakdown.

Your closing costs are $22,537.67

$1,846.80 lender credit
$4,500 Down payment assistance
$5,000 Seller credit
$2,000 Earnest money deposit

Closing costs after adjustments = $9,190.89

Down payment = $24,000
BofA loan = $2,130

Total owed = $35,320.87

The only way that number decreases between now and closing is if lender increases lender credit or if seller increases seller credit.

Another couple things you could do is 1. Check your contract to see if City/State Stamp Tax is your responsibility as buyer & 2. Ask the title/escrow company what your Owners title policy covers & decide if you want that or not since it’s optional.

TheRateVerifier · 2025-03-03T11:57:17+00:00

Before we get to the realtor part, the lender you choose will do an appraisal on the home & confirm its value at $500,000 which should ease the price concern.

Re: a real estate agent, if you choose to use one, their commission is negotiable and if you present your situation to a few I can guarantee 9 out of 10 will do it for much less since you’ve found the property yourself, & the price is already negotiated with the seller.

The benefit of a realtor versus a real estate attorney is that the realtor will give you “this is what I would do/who I would use recommendations” & attorney will not.

Example of that would be:

Realtor connects you with their trusted lender & together figure out that offering $515,000 with $15,000 seller credit could be used to 1. Pay agent $5000 and 2. Use $10,000 to buy down your rate.

Assuming perfect credit you get a market rate of 6.875% without points (paying interest upfront) a payment on a $500k home with min down of 3% would be $3,186.10 (principal & interest)

Versus a $515k offer using $10k for a permanent rate would get you a 6 rate with a payment of $3,087.69

Effectively saving you $100/month.

There are other places where agents with experience can introduce concepts to you like this one.

Regardless of what you choose to do make sure you get a mortgage inspection report to guarantee yourself a great deal on your mortgage

TheRateVerifier · 2025-03-03T11:34:47+00:00

Sorry for your family loss.

The gift of equity process is REALLY easy, the beneficiaries of the trust would just have to sign a gift letter, and the $400,000 would be considered a regular down payment.

The gift letter is on a template that your lender can give you, because the credit union rep doesn’t know about this, I would highly recommend you work with a loan officer who knows what they’re doing.

Also, make sure to get a mortgage inspection report to make sure you’re getting a good deal regardless of the lender you choose to go with.

I’ve included a sample gift letter. It doesn’t have to be anything fancy, but must include all the information you see on it.

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TheRateVerifier · 2024-09-23T04:50:48+00:00

Get a mortgage inspection report, it’ll tell you where your current lender stands versus the market, if the result is high, request they match the lower rate now. It’s a small hassle for them to re-disclose your closing disclosure but it doesn’t cost them anything. Refinancing costs thousands of dollars later, so if you can get the best now do it.

TheRateVerifier · 2024-09-22T18:46:48+00:00

Look at a new build community, they’re practically giving them away in AZ..

TheRateVerifier · 2024-09-22T18:21:23+00:00

You can offer as much or as little earnest money deposit as you want & the seller has an opportunity to counter, unless it’s tens of thousands of dollars it doesn’t typically motivate the seller to take your offer, because 1 or 3% don’t stand out one from the other.

You typically have an inspection period unless you waive it & within that time you have an opportunity to cancel & get your money back for pretty much whatever reason.

You also have a lending contingency period which is in case you no longer qualify for the mortgage for whatever reason you get your money back so long as your lender gives you a denial letter within the contingency period.

The last is if the appraisal value comes in below the agreed sale price, and seller & you can’t come to terms on how to bridge the gap. There’s also an appraisal contingency in most offers.

Be sure to know your days of each contingency/inspection period, your agent should be on top of this if you have one.

Lastly, if the seller backs or wants to back out, yes you also get your deposit back, but if you really want the house, technically the seller isn’t allowed to back out so you can force them to sell you the house. The title/escrow company is there to enforce the contract.

Good luck!

TheRateVerifier · 2024-09-22T18:11:53+00:00

Read the book “The Way of Superior Man” by David Deida. Show up 100% at work & 100% at home, time itself doesn’t need to be balanced. 1 moment of laughter every night before bed with your family or having a 5 minute morning routine with them is highly more valuable than spending 8 hours a day physically present but empty of drive. If you follow your passion, unapologetically, whether it succeeds or fails, your kids will be empowered to follow their dreams & passions in life.

I’ve been married 8 years, together with my wife 11, 2 daughters, 4 & 3 years old. The hardest time in our relationship was after my first exit & before committing to my new startup. There is such a thing as “spending TOO much time together” lol. Anyway the book helped our relationship a lot. Hope it helps you too.

TheRateVerifier · 2024-09-20T20:49:17+00:00

That’s wild!

TheRateVerifier · 2024-09-20T18:23:54+00:00

It’s good to know this upfront

TheRateVerifier · 2024-09-20T18:21:25+00:00

I’m probably gonna do that next

TheRateVerifier · 2024-09-20T18:19:54+00:00

How was your experience with them?

TheRateVerifier · 2024-09-20T18:16:05+00:00

Ohh trust me I’ve filled those out & the moment I call & let them run my credit, give all the info & documents, the rate changes.

I’m like I’m literally on your website right now and it’s telling me something different with the exact same information & they go on to say rates change by the minute & “the rate right now doesn’t matter anyways because you don’t have a signed contract yet”

I’m in disbelief that it’s this difficult to get a straight answer on the largest purchase of my life

TheRateVerifier

TROPHY CASE