Closing Costs and Banks are Disgraceful

[pooh6890]

I was so excited to purchase a new condo from Lennar. I was so excited to get $7,000 towards closing costs and upgrades on carpet, tile, appliances and cabinets....UNTIL I saw the closing statement and costs. Why give me $7,000 towards closing costs when they knew darn well it would be eaten up in the additional costs. I have only owned one home in my life. I have been a renter for many years. Some of the fees are outrageous! What bank charges a loan origination fee of $1,480 when they are the only bank I could go to? Who charges $200 for a credit report when they are basically free? Lennar charged me a 1.75% builders fee which was around $2,700!!!!! I am supposed to close next Monday on (10/27) and don't even have a HUD statement yet. Has anyone been able to negotiate these stupid fees that they are imposing or am I just stuck??? Thanks all!

 

[sam_gordon]

I was so excited to purchase a new condo from Lennar. I was so excited to get $7,000 towards closing costs and upgrades on carpet, tile, appliances and cabinets....UNTIL I saw the closing statement and costs. Why give me $7,000 towards closing costs when they knew darn well it would be eaten up in the additional costs. I have only owned one home in my life. I have been a renter for many years. Some of the fees are outrageous! What bank charges a loan origination fee of $1,480 when they are the only bank I could go to? Who charges $200 for a credit report when they are basically free? Lennar charged me a 1.75% builders fee which was around $2,700!!!!! I am supposed to close next Monday on (10/27) and don't even have a HUD statement yet. Has anyone been able to negotiate these stupid fees that they are imposing or am I just stuck??? Thanks all!

Why are they the only bank you can go to? You obviously have internet access, there's a TON of banks out there.

Have you signed a contract yet (not closed)? If so, yes, you're probably stuck. If you haven't, insist on getting the information before you sign anything.

This is no different than a company have a "sale" for 50%, but it's 50% off the MSRP, NOT what the item "normally" sells for.

 

[leebee]

I've bought and sold houses in 4 states, and basically the fees are the fees and there's nothing much you can do about them. What kills me is the title search fee. We just refinanced on our house. When we bought the house 8 years ago we had to do a title search, to ensure that our property had always been publicly available for purchase (i.e., not part of native american lands, nobody holds a lien against it, etc.). NOTHING has changed, but of COURSE a title search was required to refinance. The title was clear 8 years ago and we have been the only owners since then, but the bank has to make its money. Makes me nuts!!!

 

[Gracie09]

I too am confused about why you can't use another bank? We talked to 5 or 6 banks about our last mortgage and even negotiated some rates, but we did this well in advance of the closing date. We didn't receive our HUD until the day before the actual closing but we knew what all our fees would be and simply compared them to the ones on the page.

 

[smiths02]

We are coming up on 3 years of living in our house. We got a VA loan with 100% financing. We did a VA refi about a year ago. We never took any cash out at financing.

We are just now after 3 years going to owe what we "paid" for our house. So we have spent 3 years just paying off closing costs from the original loan and the refi (plus interest, taxes and insurance, obviously). We have a 30 year regular mortgage.


If you aren't locked in, you can shop around. You can even just ask around at other banks about closing costs and try to negotiate with your lender.

I have to say we had a good experience with our credit union and then the refi through Quicken Loans.

 

[sam_gordon]

BTW, didn't you get a "good faith estimate" of what all the various fees would be? That should have gone out to you a LONG time before closing.

 

[ericstac]

The OP probably has to use that one bank in order to qualify for the 7k towards closing promo..

 

[princesspiglet]

I understand why she can't go to another bank...we have a lot of builders around here that only use one mortgage company, and if you want to buy a house/condo from them, then you have to use their broker. I'm assuming that is her situation too.

 

[sam_gordon]

I understand why she can't go to another bank...we have a lot of builders around here that only use one mortgage company, and if you want to buy a house/condo from them, then you have to use their broker. I'm assuming that is her situation too.

Is that legal? I honestly don't know. I can understand saying "if you want $7K in closing costs paid for you, use 'x'.", but can they say you can only get your mortgage from 'x' company?

The OP still should have gotten an good faith estimate, the costs should not be a surprise days away from closing.

 

[mikehn]

If you are closing next week, its probably too late. Something tells me you did not have an agent. Usually your lender gives you an estimate of all these closing costs way up front so you know what they are before you proceed. Closing costs can be negotiated between buyer and seller as to which party is going to pay them. So the $7000 towards closing costs is absolutely negotiable, but at this point, probably too late.

 

[Disneychix]

I'm not really certain why you are mad at the Bank? You say the 7K was for upgrades and closing costs and you state it is getting eaten up by "additional costs". So did you go overboard with 'extras' and now you are mad at the bank because you no longer have 7k towards closing?

 

[Kingdome8]

Yeah that's probably only way to get the 7k is to finance thru the builder.
That's pretty normal.

All lenders charge fees. Some hide the fees in the rate and points. So it's best to shop around and get someone to explain everything.

Not just this case but everyone blames banks.
People hate fees on accts or overdraft fees but banks are not non profit.
They are in business of making money

 

[cabanafrau]

I've bought and sold houses in 4 states, and basically the fees are the fees and there's nothing much you can do about them. What kills me is the title search fee. We just refinanced on our house. When we bought the house 8 years ago we had to do a title search, to ensure that our property had always been publicly available for purchase (i.e., not part of native american lands, nobody holds a lien against it, etc.). NOTHING has changed, but of COURSE a title search was required to refinance. The title was clear 8 years ago and we have been the only owners since then, but the bank has to make its money. Makes me nuts!!!

Title searches also investigate whether or not liens have been filed against your title -- for things such as renovations or other loans. Those things could have easily happened during the past eight years & would interfere w/ the interest the bank would hold in a refinance.

 

[StitchesGr8Fan]

Those are all standard fees. You are going to pay them regardless of where you go.

 

[elgerber]

Title searches also investigate whether or not liens have been filed against your title -- for things such as renovations or other loans. Those things could have easily happened during the past eight years & would interfere w/ the interest the bank would hold in a refinance.

Exactly. And for the record, credit reports are not free to lenders, and if they have to do any updates on the report, the fees can add up very quickly.

 

[indygirl99]

We are coming up on 3 years of living in our house. We got a VA loan with 100% financing. We did a VA refi about a year ago. We never took any cash out at financing.

We are just now after 3 years going to owe what we "paid" for our house. So we have spent 3 years just paying off closing costs from the original loan and the refi (plus interest, taxes and insurance, obviously). We have a 30 year regular mortgage.


If you aren't locked in, you can shop around. You can even just ask around at other banks about closing costs and try to negotiate with your lender.

I have to say we had a good experience with our credit union and then the refi through Quicken Loans.

Yeah the bolded is my point when all these "lenders" want to talk to me about how beneficial it would be for me to refinance. Maybe to them but not me.

I have paid on my house for 6 years now and by putting an extra amount toward principle each month have effectively knocked my 30 year mortgage down to 22. But no one wants to refinance for 20 years, which would be a benefit to me, only 30 years. That only benefits the bank.

When I get them to actually listen to me and go through the math of the way I make my payments now the get all red faced and tell me "we can't help you after all".

No joke.

 

[pooh6890]

The OP probably has to use that one bank in order to qualify for the 7k towards closing promo..

DIng...Ding...Ding....that is exactly what is happening. I could go with Wells Fargo who I have banked with for many years, but I would lose the closing costs and other Lennar perks. Believe me, I have contacted other lenders and most are not writing condominium loans anyway. I was forced to go with their recommended bank and was told when purchasing that depending on my credit score (which is 821) I could negotiate interest rates too! Not true. They are doing portfolio loans and the interest rate is 5%.. Nice to know that I worked so hard to pay off all credit cards and get my score so high to not have it even matter. Salesman told me the most I would pay towards any closing costs would be around $500....so far it looks to be around $2,800 because of the stupid builder's fee.....what a headache!

 

[pooh6890]

I'm not really certain why you are mad at the Bank? You say the 7K was for upgrades and closing costs and you state it is getting eaten up by "additional costs". So did you go overboard with 'extras' and now you are mad at the bank because you no longer have 7k towards closing?

No, not at all. All the extra fees are from the bank not Lennar. The first good faith estimate showed only $8,100 in closing costs less the $7,000 is $1,100 (very reasonable). Then I got a pre-hud statement and it showed around $15,000 without the discounts...(i.e. $7,000, credit for HOA fees, etc.) Somehow it went from around $1,100 to $3,300....I am not panicking because after all the discounts I am assuming it's still going to be in the $2,000 range hopefully.

 

[pooh6890]

Exactly. And for the record, credit reports are not free to lenders, and if they have to do any updates on the report, the fees can add up very quickly.

The first estimate was $35 for the credit report....the pre-hud shows $200....I mean really?????????????

 

[elgerber]

The first estimate was $35 for the credit report....the pre-hud shows $200....I mean really?????????????

Did they have to update any of your tradelines on your report, to show something was paid off, or closed, or update a payment amount or anything?? If not, then no, I have no answers.