Home Buying in 60527>Question Details

Jim, Home Buyer in Woodridge, IL

Why am I paying more fee's if I finance less?

Asked by Jim, Woodridge, IL Thu Sep 25, 2008

Ok, I was orginally going to put down 3% on a 102k purchase. But in order to qualify for something, I needed to put down 3.5%. When my mortgage guy sent me the revised figures, the loan fee went up from 2,000 to 2,500. I asked him (thru email) why my fee's are higher and he said some mumbo jumbo about LTV that made no sense to me.

can anyone explain in common terms why, if I am financing less money, I am paying more fee's?

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Did your lender give you a GFE with the original estimate? Have you compared it to the new higher fees? Did you lock your loan rate? It is true that FHA now requires 3.5% down payment. In addition you will be charged 1.75% up front Mortgage Insurance Premium MIP from FHA plus closing costs which can range from property tax escrows & title company fees and others. Here is my blog on what to expect. I will be happy to review your GFE and see where I can serve you better.
http://activerain.com/blogsview/595164/What-are-the-typical
0 votes Thank Flag Link Thu Sep 25, 2008
I am going 3.5% so I qualify for the first time home buyers tax credit. I was reading over the website and they said you need 3.5% down.

I dont really know where the added fee's came from, he simply said in an email:

"At 97% loan to value your loan amt. is $98,940 and with the LTV at 96.5% your loan amt. is $98,430. The difference is $510. When the LTV goes lower that means you come up with more—The loan amt goes down but you have to cover the difference. Example: 80% of $102,000 is a loan amt. of $81600—That means you would have to come up with $20,400. I hope this clarifies your question. "

He just sent me a sheet showing the loan fee's for the first 3% down as 2,000 and the loan fee's for 3.5% down as 2,500.
0 votes Thank Flag Link Thu Sep 25, 2008
Hi Jim, are you purusing a FHA loan? If so, the down payment should remain at 3%. Did an appraisal come back already and maybe reflect a slightly lower value than the $102K which resulted in having to put some additional funds down? When you say loan fees are you solely speaking about section 800 of the Good Faith Estimate? If so, what fees changed-processing-points, etc.? If not a FHA loan, conventional loans still allow 3% down as well so not sure where else the 3.5% may be coming from. Please advise if you would like to review the info you have. Thanks,
0 votes Thank Flag Link Thu Sep 25, 2008
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