Financing in 85233>Question Details

Gilbertmom, Home Owner in 85233

At 1% origination fee on a $220,000 refi, why are they charging me $3,325 origination? The math doesn't work. I have a conforming loan,

Asked by Gilbertmom, 85233 Sat Oct 1, 2011

20%equity.

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The Origination Charge on the Good Faith Estimate is from the lender not the Loan Originator. The Loan Originator told you they charge 1% origination which is $2,200, the other charges are the the Processing and Underwriting charge that is also a Lender charge but not from the Loan Originator. So in your situation you have a $2,200 Loan Origination and $1,125 Underwriting and Processing.

Talk to your lender but that is what is happening. As part of my consultation I share with my borrowers that some of the numbers just don't add up and need expert explanation and they should call me if they have questions. My advice to Realtors is to defer this topic to the Lenders, it can be difficult to determine how the numbers break down.

Gilbertmom, if you want additional consult on this subject please contact me. Thank you and good luck.

Matt Puzz
Licensed Loan Originator
Amerifirst Financial, Inc.
602-410-9333
apply online: http://www.mattpuzz.com
Web Reference: http://www.mattpuzz.com
1 vote Thank Flag Link Sat Oct 1, 2011
It is confusing, isn't it? The 1% origination fee (referred to as points) is now bundled into the "origination charge" - all lender charged fees. This was part of the late 2009/early 2010 changes to the Good Faith and Truth in Lending forms to make it "easier" for the borrower to shop for a lender.
I agree with Matt that your loan officer should walk you through all your charges, ideally at the onset, so you know what you're paying to refinance before you decide to proceed.
In the case of a refinance, it's helpful to distinguish ALL costs, the largest portion being lender and title co. fees. Most companies have an "overview" or summary form that will distinguish costs from "prepaid" interest, taxes and insurance impounds. Those last 3 are not actual costs of the REFI TRANSACTION. They relate to the actual loan and home, and are partially reimbursed by the refund from your current lender's escrow balance. Ask your loan officer if they have a summary that breaks out costs from prepaids.
Having that information will help you make sure you're meeting your goal for the refinance in the first place.

It's good that you are able to take advantage of the current low rates, many don't have enough equity to do that. If you can't get the answers you're looking for, you're welcome to call me. I can walk you through what's happening and make sure it meets your goals.

Sincerely, Catherine
2 votes Thank Flag Link Sat Oct 1, 2011
Most likely because you are looking at the GFE and what is listed on the GFE on page 2, box #1 is the origination fee plus lender fees such as underwriting and processing if applicable. If your origination as listed on a worksheet is $2200, this means your other lender fees would total $1125. This would not be completely out of the norm to have $1125 in lender fees on top of the origination fee. Ask your loan officer for the breakdown in a worksheet so you can see exactly what goes where.
Web Reference: http://WeFixRates.Com
1 vote Thank Flag Link Sun Oct 2, 2011
Hi, Gilbertmom. The best way to answer your question is to ask your current loan officer. Anything outside of that will be pure speculation.
0 votes Thank Flag Link Sun Oct 2, 2011
The most fair and honest thing for you to do is speak directly with your loan officer. Only he/she can explain what he/she did. Only your loan officer can answer for themselves. Asking other people to answer for your loan officer is not right because no one knows the exact circumstances of your transaction. Don't put it off, make the call.
0 votes Thank Flag Link Sat Oct 1, 2011
What kind of trust do you have in your lender? While you must do some research and be educated. The days of lenders just handing out Good Faith Estimates are gone because not the lenders are held to more of the quoted fees on the original Good Faith Estimate so it is easy for them to get burned at the end of the transaction. While I have agreed with Jeff in the past on some of his comments I do not agree with him on this case. I recently had a lady that decided to change to another lender with a close of escrow date of September 23rd and as of this written opinion the deal has still not closed. Why?? Because the other lender told the customer something that could not happen and what she wanted to hear; they will probably lose their house and earnest money because of a lender that did not give good advice.
Brad, I would like you to meet my processor and underwriter, you will call my "junk fees" "gold fees". There are many realtors in Maricopa county that shared in over $1.5 million on commissions last year because of the work my processor did on hundreds of loan files. Gilbertmom, if you trust someone to help you with this important purchase and want it to close on time don't let a couple hundred dollars create an unstable or unpredictable lending environment. Good Luck.
Matt Puzz
Licensed Loan Originator
Amerifirst Financial, Inc.
602-410-9333
apply online: http://www.mattpuzz.com
Web Reference: http://www.mattpuzz.com
0 votes Thank Flag Link Sat Oct 1, 2011
They are required to esimate all charges and fees in your loan and put them under the heading of origination fees, it includes points as well as includes any application fees, processing fees, delivery fees, wire fees etc.. Your best bet is to ask your loan officer as they can expalin the exact fees included in your estimate.

http://www.trulia.com/blog/scott_godzyk/2010/10/where_do_i_i…

Please see my blog with tips and advice on getting a mortgage
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Oct 1, 2011
Dear Mom:

You can negotiate. Getting competitive bids will give you power.

Jeff Masich
Web Reference: http://ArizonaHomesLand.com
0 votes Thank Flag Link Sat Oct 1, 2011
It is what we in the business call "Junk" fees some are necessary some may be not.
Shop around look at the Good Faith don't get over charged.
0 votes Thank Flag Link Sat Oct 1, 2011
$3,325 is more than 1.5% the loan amount. It obviously doesn't add up. Have you asked your lender? I am sure they will gladly explain it to you, or correct it if there is a mistake.


Carlos J Ramírez, PC
Broker/Realtor, ABR, CNE
Certified Negotiation Expert
602-512-5825 direct
602-749-6327 fax
http://www.SmartAZRealty.com
0 votes Thank Flag Link Sat Oct 1, 2011
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