HARP Refinancing Loan Costs Negotiable? Estimated Costs very HIGH?
I would appreciate if you have any advice on this refinancing matter. I own a condo (Los Angeles, CA) that was originally an interest-only loan. Now I could qualify for the HARP government-sponsored program and fortunately qualify for an interest rate of 5%.
However, the closing costs worksheet that the Chase company gave me had high fees and points attached to it. Here is the following:
Loan Origination Fee: $0
Loan Discount Points: $3,400
Credit Report Fee: $10
Tax Service-Chase Home Finance LLC: $45
Application Fee: $365
Underwriting Fee: $295
Courier/Delivery/Messenger Fee: $50
Flood Certification: $11
Escrow Fee: $730
Sub Escrow Fee: $125
E-doc closing Fee: $125
Recording/Filing fee: $67
It seems like these fees are estimated by the branch manager and can be negotiated. The fees seem like the rate charged during the 2007-2008 period.
Please add your professional advice, thank you.
Thank you mortgage brokers and others. Will call the mortgage broker and ask about the loan discount point fee.
FICO score and asset will not verified through the HARP refinancing program. LTV is at 110%.
- BobLv 61 decade agoFavorite Answer
Most of the fees look pretty modest compared to what is charged in this area, and it is illegal for a lender to mark up the fees of a third party service provider such as an appraiser or escrow agent. The only one that stands out is the $3400 for discount points and it is impossible to say if that is competitive without knowing more about the details of your application such as loan amount, appraised value and credit score.
The discount fee by definition is supposed to provide you with a lower rate than the prevailing rate for your situation. Find out what your options without that fee or with a lower amount and determine if the benefit you get from lower payments will allow you to recover your initial cost in a reasonable period of time. You should also ask someone you trust to refer you to a good lender or two and call them for competitive bids.Source(s): Licensed Loan Officer in Ohio
- liveinmdLv 51 decade ago
HARP loans are generally expensive; however, the biggest flag to me is the discount points. Discount points are what you pay to get a lower rate and are a percentage of the loan amount so (I don't know the loan amt so I am making guesstimates) so, on say a $200k loan, you are paying 1 and 1/2 points (apx). Have them quote a 0 pt or par rate.
There are no regulations on closing fees (other than the normal) for HARP loans and many lenders are using fees to recoup some of their losses.
Are these numbers from your GFE or preliminary HUD1? There has not been a drop in fees since 2007-2008 (maybe during the pre-HARP days) and, with the exception of the high discount, the fees are pretty averageSource(s): Mortgage professional
- Anonymous5 years ago
All of the fees that you listed in your question are going directly to your Credit Union. Should you pay them? It depends on what you are buying from them. Consider the interest rate that you are offered, and what kind of product, 30 year fixed, or adjustable. Insurance? They are setting up an escrow account for you, so that your payment will include insurance (probably taxes as well). You can ask them if you can still get the same deal if you don't include taxes and insurance in your payment, or you can ask for only taxes to be included. The final settlement charges of $8,365 may or may not be a bad deal, depending on what kind of interest your are getting and what type of product. You can definitely get a home equity loan cheaper as far as closing costs are concerned, but rate will probably be higher, so you need to take in to consideration how long your are planning to keep that equity loan. If you think that you are going to keep it for a long time, the higher interest rate may become more expensive than the cost of refinancing.
- Go with the flowLv 71 decade ago
Ask to not have points - this will save you $ on your closing costs.
Why pay points?
Later on in your future just start making extra payments towards principal.
If this is a 30 year loan, you can set up a plan to have it paid off in 15 years - with you in control...
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- David14Lv 71 decade ago
Good luck. Don't expect them to negotiate.
- Anonymous5 years ago
Thanks for all the answers!