closing costs

[phishphan]

My credit union offers this:
Closing Costs: we'll waive many of the fees and charges other mortgage providers charge.

I had read that they sometime roll the costs into the mortgage through the interest rate? Do they always do this or do some actually mean what they say? Is there other ways that they get back their money?

Do people usually have a real estate attorney look over the contract? How much does this costs (ballpark)?

How can the new tax deduction from PMI make it a better option than the piggy back loan? Is it because of the rate of interest on the 2nd loan?

Thanks for the help

[Thesa]

A good faith estimate will answer a lot of your questions - lenders have to disclose the cost of the loan in detail. The other questions you have should be answered by professionals in your area - different areas have different circumstances just as individuals do.

[Alpharetta]

Mortgage insurance is not deductible the way that interest on your home loan is. It is often not that much of a savings by deducting your interest however. Your income tax rate affects how much you actually save. The higher your tax rate, the better the deduction.

You can roll the costs in a number of ways - simply by adding to the price of the home, with a higher rate or by having the sellers contribute to pay the costs.

[DEUCE]

Yes you should try to get a "good faith estimate".

[phishphan]

i have been reading that PMI on homes purchased this year is tax-deductible. knowing that, i didnt know how the two compare. thanks for the info.

[DEUCE]

so is the interest.

[TJ2007]

Credit unions often offer some pretty decent deals but;

1) Yes often less fees can mean a higher rate you need to look aat the APR which alllows you to compare the real cost of the loan.

2) They are going to waive fees other companies charge - (this is often rolled in to rate) the biggest costs are normally the taxes, title, insurance etc not mortgage company processing fees.

3) If you are working with a mortgage broker often the attorney of title company who does the closing will assist you with the contract for a nominal fee of maybe even free as they are already getting you biz for title insurance.

4) Everyone says 'I don't want PMI' however you are going to pay one way or the other - either in the rate or PMI, often equates to about the same payments, however interest has always been deductable (but you have to talk to you accountant to see if it really makes a difference based on your circumstances)
However PMI can be taken off once you get to a certain level of equity - reducing your payments
Really depends on how long you are going to be in the property with this loan.

[mcole]

By law, a Good Faith Estimate (GFE) must be provided within 3 days of you signing the 1003 loan application. That’s not an option for a lender, they HAVE to provide it.

But remember, it’s merely an estimate -- nothing more. It doesn’t necessarily mean that’s what your actual costs are going to be.


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