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Are these closing costs to high? Please advise

The last time I purchased a home was 6 years ago when this process seemed a bit more simple.  I just received a GFE from my loan officer and had sticker shock on the closing fees.  Please give me your thoughts on the following:

Credit Score: 830

Home Price:  $74,100
Down Payment: $10,000
Rate:  4.5%

Fees from page 2 of GFE:

Module A:
Origination Charge: $3,523
Lender Credit: $1,151.88
Adjusted  Origination Charge: $2,371.12

Module B:
Appraisal ($500), Credit Report ($50), Flood Certification ($8), Tax Service Fee ($85):  $643

Title Services: $690
Survey: $650  (2 acres with easement to home)
Gov. Recording Charges: $125
Initial Escrow Deposit (taxes + Ins.): 649.06
Daily Interest: $200.31
Homeowners Insurance: $960

Module B subtotal - $4,067

A + B Total Estimated Charges: $6,438.49


For such a modest loan, I find it hard to believe the loan and fees is equal to 10%!

Thank you for your assistance!
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November 16 2013 - Gainesville
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Answers (8)

I ran your numbers through the pricing engine on my website, and for that same rate (4.5% on a 30 yr fixed) the total of Module A + appraisal, credit, flood cert, etc (aka GFE Line 3) was only $1,502.00, compared to the $3,014.12 your lender is charging you, so about $1,500 too high.  If they are brokers they aren't using a very price competitive lender on your deal.  As others have mentioned the other items listed are going to be the same regardless of where you go for the loan, and look about right.  Escrow deposit might be a little too high, but hard to know without seeing what the taxes are on the property.

If you wanted to bump the rate to 5.125% you could get the lender to pay about $1,700 of that stuff for you, so by switching lenders and increasing the rate you could potentially shave the total down to $3,200.
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November 16 2013
I would shop it to a couple of other lenders.
Origination looks high to me.

Can seller provide a survey?
Insurance also looks high to me....have you shopped around?

Most lenders won't lend less than $50,000 for this reason.  I get this is a loan more than $50,000, but it is close.  A lot of the fees are fairly fixed...like escrow fee at title company.   So that doesn't matter if it is a $60,000 loan or $600,000 loan.....it makes the lender look bad, when a lot of the fees are semi-fixed and looks like high cost to the borrower.
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November 16 2013
Get with your Realtor and go over the costs. 
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November 16 2013
Profile picture for Viper0500
Thank you all for your replys.  If the origination fees are high, what would you expect to be a more competitive offer? Due to my lack of experience, i'm not sure how much lower I should try to negotiate.

What is the current market rate for a loan like this?

What does it mean when a "loan fails high cost"? 

My loan officer has been a pleasure to work with so far, I just want to make sure that it is a square deal.  She told me that smaller loans like this will have slightly higher interest rates since banks try to avoid them.  Is this true?   I will certainly get some other quotes for comparison's sake.

Thanks again, you all have been a great help.
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November 16 2013
Credit Union's are great for small loans might want to call your local CU
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November 16 2013
Origination Charge = fees controlled by the lender
They are way too high.
The lender credit is for the rate of 4.5%.... that is above market rate and the lender gets a rebate when they sell the loan for selling you that rate.
Take your gfe to another lender for a comparison offer

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November 16 2013
Origination looks a bit high but that's it. Keep in mind, although TECHNICALLY these are all closing costs, you can pretty much cross off daily interest, homeowner's insurance, initial escrow deposit, and your title & govt fees ($960, $690, $650, $125) because these would be the same regardless of who financed through. Appraisal is a bit high but only by $100 or so. I never charge for a credit report ($50 is way too high). The only thing I can think of is instead of charging you discount points, they increased their origination costs. You may want to inquire about the high origination fees.

This loan may fail high cost and they would have to drop some fees before closing. When you have a smaller loan amount, this is very common. Overall though, you are not having one put over on you at all. If you feel they are doing a good job with your loan and can get it done quickly, it may be worth the extra $$$. Good luck!
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November 16 2013
Looks pretty normal to me.  Most of the costs are fixed, which is to say they would be the same whether you were getting a $64K loan or a $640K loan.  If you think about it, it's the same amount of work either way.  In fact to be perfectly honest, I generally find the smaller loans are a lot more work than the larger ones.
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November 16 2013
 
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