origination charges high? or normal?

Asked by muyi_007, Albuquerque, NM Thu Aug 2, 2012

$190,000 loan, credit score 712, 15yr, fixed rate 2.75, origination fee $4820

Is this a reasonable deal?

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, ,
Tue Nov 13, 2012
These days there are a lot of things that are lumped into the category of Origination Fee. I would guess that what this might be is 2 points, plus bank fees.
This question was posed over 3 months ago, and I do remember locking in a conforming 15 year fixed at that time for 2.75% with 0 points, so the origination fee was $1295, which are our total bank costs including tax service fee and flood cert, which some lenders put on a different line, but we include in our underwriting fee which goes where the origination fee is. However, I have chosen to price my loans out based on a lower commission structure because my average loan size is much larger. Many loan officers price their loans out higher than I do, plus there is a .75 adjustment for the credit score of 712, and if the loan-to-value is higher, it could be more than that. Also, pricing is better on larger loan sizes of $200,000-$417,000. It is always a good idea to compare, and sometimes paying a higher rate makes sense because on a 15 year fixed, the points you pay take much longer to recoup in terms of savings.
0 votes
Heather Mead…, Agent, Albuquerque, NM
Tue Nov 13, 2012
Of all the homes I have closed here in Albuquerque I have not seen an orgination fee this high. They have always been under 1%. Infact the lender I use here does not charge an orgination fee at all!
0 votes
, ,
Fri Nov 9, 2012
$4820 divided by your loan amount $190k equals 3% in origination charges. The rate is good. Since they are giving you a good rate they may be charging the $4820 due to the Loan Level Price Adjustments plus the underwriting and the processing fees. It's hard to say without know if this is a refinance or purchase, and what the loan to value is if the terms are fair truly. Seems to me, you could get cheaper by maybe $1k if you look. I would try another local mortgage banker or broker to help you with your search. Tell them the terms and your score. Don't let them each pull your credit as your score will be impacted by this as well you will have to write a letter concerning each inquiry. Let them know what you have and what you're looking for. If they can beat the deal go for it. If they can't, stay where you are.

Best of luck,
Kimberly Lawson
Ohio Loan Originator
T/F 888-659-3848
First Priority Financial
NMLS: 5601 OH.LO.004495.000
0 votes
Joshua Chris…, Agent, Albuquerque, NM
Fri Nov 9, 2012
The information provided is not enough to determine whether this is a good deal for you. I'd be happy to discuss it further at your leisure. Your Good Faith Estimate gives you a place to compare and shop other lenders to find the best deal to meet your needs.
0 votes
Inez.garcia66, Home Buyer, Albuquerque, NM
Mon Sep 10, 2012
thats high , usually origination charge should max be 1% that looks like 2.5% ,, thats high. my opinion
0 votes
, ,
Fri Aug 3, 2012
I would say it depends on if you are a reasonable borrower or not, but that isn’t what you are asking. According to the Feds the APR disclosure answers this question when you compare it to other options that you have available. I don’t agree with that entirely but it is a starting point.

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
0 votes
Steve Quinta…, Agent, Albuquerque, NM
Fri Aug 3, 2012
007, please run this question by a loan originator who does a great job. Give me a call or send me an email and I will introduce you to a lender that always does a great job for me.
0 votes
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