Closing Costs & Loan Servicing

[giacona]

I have 2 questions:

1. Closing Costs: A buddy of mine just went through a refinance and his total closing costs including taxes, escrows were quoted 16K on the loan estimate. When he closed it was less 13K. Obviously the exact costs are not until shortly before the closing. Is there a reason why he receives a check for the balance instead of reducing his loan amount? It sounds to me that this loan officer was trying to make as much as he could for himself. Now I know there are honest loan officers out there and some are on this forum. I just wanted to get an opinion on this

2: Loan Servicing: I know there is nothing we can do as a lot of lenders are not in the business of servicing loans. Most are sold shortly after you close. I am in a position where I am going to attempt to pay my mortgage off ASAP once I do find a property. After speaking to some friends and family they told me not every loan servicer will allow you to make extra payments. I want to be able to set up bi weekly payments. What are my options if I wind up with a servicer that does not allow this?

 

[Erik Sandstrom]

Hi Giacona,
Sorry about the late response, it sure has been a busy few months to say the least in our world.

When it comes to each transaction there are different ways to structure it depending on the borrowers overall goals. Also interest rates do vary depending on each unique borrower situation, how much their home is worth, what they owe, the type of transaction, most importantly credit score all influences what interest rate is available for that specific person.

But, yes there are people out there that take advantage of homeowners constantly. I seem to be on the more aggressively priced side of things because I personally work for a bank and we can't pick and choose what we want to make on each loan like some typical brokerages can.

Now, to get to your comment about the closing costs reducing slightly at the end. This to me seems like there are variables in play and first and foremost with a refinance we do (as lenders) disclose whatever fee COULD apply in a transaction, one of the most common is an "Appraisal Reinspection" that costs usually on average $150 if the appraiser has to go back out and visit the home let's say due to a smoke detector not being installed. There are also variables that can change depending on when the loan is close, a big one would be taxes and insurance - sometimes taxes are paid by the previous servicer and therefore not needing to be collected on the new loan (or a large majority of it).

All in all, those costs sound incredible high unless he was paying a huge amount of points just to get a lower interest rate.

I'm always up for a challenge when it comes to beating out everyone on first quote type basis, give me a ring anytime at 619-379-8999 or [email protected] and I'm happy to go over different scenarios with you or anyone you may know looking to refi.