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Help!!! FHA Streamline Refinance Closing Costs Question

loan amount: $121,000
yrs: 30
Rate: 3.375
Origination Fees: 2.5%
title insurance: $898
Processing Fee: $599

Supposed to close today. I have not yet seen the final GFE but am a little suspicious of what will be in it based on a few recent comments from the loan officer. I decided to look a little more at the original "temporary" gfe and I am a bit disturbed at what it is showing. I wasn't too worried about it previously because we thought we had a time sensitive situation (which we no longer have).

I am interested in your thoughts about the loan origination fees which seem very high to me, and obviously, the ridiculous "processing fee". Thank you for any input.
  • December 27 2012 - US
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Answers (7)

Best Answer

You would have  had to have seen the final GFE at least 5 days ago if you are closing today. The 2.5% origination fee  and $599 Processing would have had to have been on the previous GFE for it to be charged at closing, so neither should come as a surprise.  Without knowing your credit score, it is impossible to determine if 2.5% origination fee is high. I am sure sometime in the process you could have requested a higher rate and lower origination fee to compare which option was most beneficial.  $599 Processing Fee may be high but may include other fees that would typically be charged.
  • December 27 2012
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With a FHA Streamline loan, I ordinarily allow a lender credit that will offset these costs.  It all should depend on whether or not you are willing to pay any of the closing costs or do you want the costs covered in the loan.  If it is anything other than that, you seem to be paying an awful lot of of costs with this loan.  There may be mitigating factors that we do not know but it seems a but steep with out of pocket money.
  • December 27 2012
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Profile picture for juroot
Thanks for all the responses. The $599 "processing fee" is actually the difference between the origination fee and the lender credit.

The final HUD-1 (which I have now seen since posting) was a more accurate picture then the previous GFE.

I will end up paying $500 for the loan and $500 in interest for January's payment (and I will not have to make a January mortgage payment).

I was worried about a bait and switch because this is non-owner occupied where the property and loan officer are in a different state then where I currently live.

Again thanks for the help and clarifications. 
  • December 27 2012
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What matters most is what is in Box A of your GFE, labeled as Adjusted Origination Fee.   Let us know what dollar amount you have there.
  • December 27 2012
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Hello,
The 2.5% origination and processing of $599 are a bit high but not absurd for a new loan.  If disclosed correctly this should not be a shock to you because they should match up to what you originally agreed to when starting the loan process.  In most cases if you look at box 2 of the GFE you will see a lender credit to help offset most if not all of your fees.  So if you got a lender credit of let's say 4 points of the loan amount that would be 4,840 to help offset the new fees being charged for the streamline. 
Best of luck! 

  • December 27 2012
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You should contact another loan officer to compare your current GFE.  No reason to pay so much in fees if you do not have to.

  • December 27 2012
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If this is a FHA Streamline, I would hope there is a lender credit that you are not seeing to offset these costs.  Otherwise you will be coming out of pocket with an awful lot of money.
  • December 27 2012
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