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Is this a good deal for refinance under HARP 2.0?

We currently have BofA 5.875% rate on a loan of 391,344.  However, it's underwater between LTV 110% to 118%.  BofA was willing to lower the rate, but it was going to cost me, so I went to a broker.

The broker, unfortunately, told me that my loan did have PMI, but that the lender (BofA) was paying for it.  He said I wasn't aware, because the bank hid it by giving me a higher rate at the time of the loan.

This is the Good Faith estimate that I got for refinancing an underwater home for HARP 2.0.  This is for a loan of 396,000 for 3.875%.  Keep in mind that it does NOT include the PMI yet:

Origination charges
underwriting fee 895
funding fee 199
other charges 1.25% (4,950.00)*don't understand this one
 
appraisal fee (450.00)
credit report fee 50.00
tax service fee 78.00
flood certification 10.00

closing/escrow fee 475.00
notary fee 165.00
lender's title insurance 605.00
mortgage recording charge 100.00

hazard reserve 529.65
county property tax reserve 4,866.70
aggregate adjustment -48.15

daily interest charges  937.75

*Refinance: 391, 892, prepaid items/reserves 6,285.95, estimated closing cost -2, 373.000 (this was negative, so I assume some credit), loan amount 396,000. 

Principal & interest 1, 862.14 (I currently pay 2, 467)...and the total payment would be 2,396.96 because I need to inlcude my hazard insurance and property taxes in payment.  It might be higher because it doesnt have the PMI included.
  • July 26 2012 - Clove Lake
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Answers (7)

Agree with Norm and as stated before, the only number that matters on your GFE is Adjusted Origination Charge.  

That is the area where bank, broker, direct lender, all are made to be equal.   Adjusted Origination is how much YOU pay before taking into account 3rd party fees and prepaid items.

If you find your Adjusted Origination fee to be high, you might also ask for a GFE at 4.00 rate (or ask they complete they tradeoff table for 4.00 on Page 3 of the GFE).   Most lenders are offering a nice "bump" up on closing cost credit on 3.875 vs. 4.000.   

Keep in mind your Adjusted Origination Fee can be a negative number, this means the bank/broker is earning they profit/comission at the quoted rate and the negative number is the amount left over to pay toward your 3rd party expenses.
  • July 26 2012
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compare block A; no matter what each lender decides to call their charges (discount, origination,....) block A cuts to the heart of it and shows what the lender is charging you.

what jumps out at me as missing is the NY mortgage  tax of about $7,000. You can avoid that with a CEMA, however the fee for a CEMA can run upwards to $1,000 and even then there's no guarantee BOA allows a CEMA (that's where they agree to transfer loan rights).YOu could avoid that either/or situation by staying with BOA.



  • July 26 2012
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You're right...I got a paper that has "fees worksheet."  I turned in all the papers that were requested on Monday.  I read online that you should get a good faith estimate within 3 days.  That would mean that I need to receive one by today!

I'm not sure how many other good faith estimates I should get.  All the other places I contacted were also going to charge me discount points just for the rate, so that's why I went with this broker.  He said there would be no discount points for the rate he was quoting me for.  However, there are origination points, but they seem to be the same as the others I contacted. 

My credit union was going to charge .75 discount points 2935.13 plus 2255 closing cost....and then my tax & insurace reserve on top of that!  And of course this would be with no money back.

I figured this person wasn't charging me the discount and the closing cost is about 1332 (underwriting, funding, credit, tax service fee, flood certificate, mortgage recording charge) plus 1245 for closing/escrow/notary/title.  I can use 2373 credit to help pay the 6285 for the 11 months of property tax and 10 months of house insurace.

I figured the broker was getting me a better deal than my credit union.
PLEASE tell me if I'm correct...is the broker giving me a good deal?

  • July 26 2012
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it doesn't list the mortgage tax
  • July 26 2012
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Then you haven't received a Good Faith Estimate.   Ask for one, a real one.
  • July 26 2012
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Justin Scheftell: there is no page 2 of the good faith estimate, so I don't see anything that has "adjusted origination."
  • July 26 2012
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The only important number is the "Adjusted Origination" Fee on Page 2 of the Good Faith Estimate.   What amount is listed there?

As to the PMI, your broker should be finding out if your policy was "single pay", meaning it will transfer to your new loan with no impact, or recurring which means you will have to pay a monthly premium as part of your new loan. The PMI won't affect your GFE costs at all, however it would be good to at least know where you stand on the issue.

If they are at the point of providing a GFE, this issue should already have been researched.
  • July 26 2012
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