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$7,000 + for a FHA streamline refi?

I just got a GFE from Wells Fargo for a streamline FHA refinance on my loan. They're telling me it's gonna cost over 7k for a refi. Is that even reasonable? That's way more than I was expecting to pay considering all the stuff I got in the mail telling me how a FHA streamline refi was so affordable. My current rate is 6.5% and I was hoping to get something around 5% but the best rate I've seen through them is 5.5%...

I'm in the 95828 zip and I payed 215k for my house that appraised at 220k 6 monthes ago. My current LTV is 203k.

I called Citimortgage to see if my loan qualified for the fannie/freddie federal program that just got released and they said "no..."
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March 05 2009 - Elk Grove
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I would do some comparison shopping - possibly with a Mortgage Broker, and see what someone else may have to offer.  It is often prudent not to go with the first lender you contact.  If you are looking for a couple of local referrals to choose from, please feel free to email me and I will provide you direct contact information.  Good Luck! [contact info removed by moderator]
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April 06 2010
neverborne, the big problem with the streamline refinance is the FHA requires to reset your up front mortgage insurance of 2.25% right now. Last week it was only 1.75%!  Sometimes the FHA will give you a refund of your Mortgage Insurance Premium from your current loan. If you are borrowing $200,000 that is $4,500 in closing costs that can not be waived because it is mortgage insurance the FHA charges on your new loan. Unfortunately, $7,000 is not out of line but, you could probably still get 5% to 5.25% for a rate and not 5.5% today.
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April 06 2010
Neverborn. streamlines are very reasonable. the biggest expense should be the creation of new impound account and if the payyoff lender has paid taxes due 4/15. Sacto county usalley does not show 2nd installment paid untill late April. keep in mind, you will be reimbursed the payoff lenders impound acct balance 4-6 weeks after close. I would be happy to runn a qoute for you.
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April 06 2010
Justin,

Property taxes and insurance are not closing costs. They are a reserve or savings account set up for the borrower to pay his property tax and homeowner insurance obligations at a later date. Mortgage Insurance last time I checked is the biggest cost in a streamline refinance! Upfront Mortgage Insurance is financed but, it still is a cost. Neverborne is already confused by the good faith estimate he received from Wells. Please don't confuse him anymore.
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April 06 2010
Randy, however you want to spin it. We all know at the closing table somebody has to front that impound acct. with borrower funds or lender credit. 
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April 06 2010
Based upon what is available today, a 5.00% rate on a 30 year fixed mortgage seems reasonable; with minimum lender fees. Some banks will be more affordable and offer better rates than their competition. Which is why you were offered a 5.50% rate. And, you need someone to explain the true cost of refinancing your mortgage - said explanation should separate the closing costs related to lender fees, title fees, transfer taxes and recording fees from your impounds (escrows). An escrow account should not be considered "closing costs" when analyzing your refinance options. However, it must be considered when determining your final loan amount.
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April 06 2010
 
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$7,000 + for a FHA streamline refi?
  • Posted by neverborne
  • In Refinance
  • March 05 2009
Mortgage Rates
 
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