Some unanswered questions about my good faith estimate (GFE).

Asked by Arslan Basharat, Albany, NY Sun Feb 21, 2010

Purchase price: $230,000
Interest rate: 4.875% 30 Yrs FHA
Down payment: 3.5% ($8050)
Load amount (includes MIP): 225,834
===Closing cost====
Our origination charge: $200
Appraisal/Property Evaluation Fee: $440
Credit report fee: $2
Tax service fee: $82
Flood determination fee: $11
Mortgage Insurance Premium: $3884.13
Title service and lender's title insurance: $1106.14
Owner's title insurance: $1239.15
Government recording charges: $370
Transfer taxes: $2613.34
Initial deposit for escrow (all property taxes, all insurance): $3362.55
Daily interest charges (13 days @ $30.16): $392.08
Hazard Insurance premium: $650

Total Estimated Settlement Charges: $14,352.39
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My questions:
-Why is MIP included in loan in the closing cost?
-How can I save money on any of these listed items? For instance, any tricks on title insurance?
-Where do I double check the "transfer taxes" from?
-Shouldn't the hazard insurance be included in escrow?
Thanks.

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Answers

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Lewis Beynon, Agent, Clifton Park, NY
Sun Feb 21, 2010
Arslanb,

First and foremost, I am a REALTOR, not a loan officer, so please accept my comments as a matter of personal opinion not legal advice.

MIP is required when the LTV (Loan to Value) is over 80%. Once you pay the loan down and realize appreciation so the LTV is less than 80%, you can have MIP removed.

Title insurance for the lender is required by the bank but it is optional for the buyer. However, I HIGHLY recommend it!! Try to negotiate a better price, although these rates MAYBE controlled by the state.

Lenders can't play games on the transfer tax simply because it is a TAX. They can't over charge you and then only pass on part of it to the state.

You are required to bring a paid hazard insurance policy to closing. This is POC (paid outside of closing) so I'm not sure why they are showing it here too. Ask for the details on the escrow amount ($3,362.55).

Best wishes on a smooth closing!!!

LewisB
Web Reference:  http://www.LewisB.com
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