Author Topic: Help Needed! Closing Costs on my first rental property  (Read 2378 times)

Neo

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Help Needed! Closing Costs on my first rental property
« on: March 25, 2016, 07:59:22 AM »
I'm closing on my first 4-family rental property in about 40 days. I received the fee worksheet and it seems very high. The property is only $101k. The down payment will be 25%, so the loan will only be about $75k. Below are the actual fees on the Fee Worksheet. Between pre-paids and closing costs they are totaling $7,610. Does that seem really high to anyone else?

Looking for thoughts on if any of these charges are BS, overpriced, unnecessary, etc. Thanks!

FEE WORKSHEET:
Discount Fee Memo Item - $1,136.25
Appraisal Fee - $500
Credit Report - $32.50
Tax Service Fee - $72.00
Flood Determination Monitoring Fee - $4.00
Application Fee - $350.00
Processing Fee ($450.00-L) - $450.00
Appraisal Management Company Fee - $140.00
Automated Underwriting Fee - $20.00
Underwriting Fee ($400.00-L) - $400.00
Electronic Closing Fee - $15.15
Pre-paid Interest - $259.86
Pre-paid Homeowners Insurance Premium - $1,000.00
Title-Closing Fee - $560
Title-Owner's Title Insurance - $376.75
Title-Lender's Title Insurance - $304.00
Title-EPA Endorsement - $75.00
Title-Survey Endorsement - $50.00
Title-Closing Protection Letter - $40.00
Title-Restrict/Encroach/Mineral - $150.00
Recording-Deed - $28.00
Recording-Mtg - $212.00
City/cty tax/stamps Deed - $202.50
State tax/stamps - Deed - $101.00
Property Inspections - $600.00 (this will be paid out of pocket by me and wont' be this much)
Homeowners Insurance - $249.99
Hamilton County taxes - $364.34
AGGREGATE ADJUSTMENT - -$83.33

GRAND TOTAL - $7,610.01

marty998

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Re: Help Needed! Closing Costs on my first rental property
« Reply #1 on: March 25, 2016, 05:26:29 PM »
Try paying stamp duty in Australia. Then come back and complain to me :)

Ignore the prepaid interest and prepaid insurance premiums... you are going to pay those items regardless, and pay them every year.

However, what its the 1st item...Discount Fee Memo Item?


Neo

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Re: Help Needed! Closing Costs on my first rental property
« Reply #2 on: March 25, 2016, 06:07:52 PM »
I think the first item is code for buying a point. It should go away by the time we close bc I recently raised my credit score dramatically.

NoNonsenseLandlord

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Re: Help Needed! Closing Costs on my first rental property
« Reply #3 on: March 25, 2016, 07:31:45 PM »
The fees seem excessive.  Take out pre-pays and taxes.  Ask for an explanation of each one, BEFORE you close.  Get another estimate from a different title company.  Find out what fees are lender required, and which are closing company expenses.

The title company should be able to explain them.

Discount Fee Memo Item - $1,136.25
Appraisal Fee - $500   Prob OK
Credit Report - $32.50  Prob OK
Tax Service Fee - $72.00  What is this?
Flood Determination Monitoring Fee - $4.00   Prob OK
Application Fee - $350.00  What is this?
Processing Fee ($450.00-L) - $450.00 
Appraisal Management Company Fee - $140.00  This is BS
Automated Underwriting Fee - $20.00  This is BS
Underwriting Fee ($400.00-L) - $400.00 Prob OK
Electronic Closing Fee - $15.15 This is BS
Title-Closing Fee - $560   Seems high
Title-Owner's Title Insurance - $376.75  Prob OK
Title-Lender's Title Insurance - $304.00 Prob OK
Title-EPA Endorsement - $75.00 Prob OK
Title-Survey Endorsement - $50.00 Prob OK
Title-Closing Protection Letter - $40.00 This is BS
Title-Restrict/Encroach/Mineral - $150.00
Recording-Deed - $28.00 Prob OK
Recording-Mtg - $212.00  This is high
Property Inspections - $600.00 (this will be paid out of pocket by me and wont' be this much)
AGGREGATE ADJUSTMENT - -$83.33

Neo

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Re: Help Needed! Closing Costs on my first rental property
« Reply #4 on: March 25, 2016, 08:19:45 PM »
Thank you for the itemized reply. Thats exactly the expertise I was looking for. The sad part is, I work for the bank giving me the loan! They dont mind ripping off their own employees.

Blindsquirrel

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Re: Help Needed! Closing Costs on my first rental property
« Reply #5 on: March 25, 2016, 11:54:18 PM »
 If they operate in your area, I recommend Union Saving/Guardian savings I would shop around as that is higher costs than I have ever seen.

Neo

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Re: Help Needed! Closing Costs on my first rental property
« Reply #6 on: March 26, 2016, 05:15:46 AM »
Funny you mention that. We are working with Guardian but they were slow in getting back to us so this fee estimate is from one of their competitors. I signed and mailed in the loan paperwork yesterday but we don't close for another 40 Days. By signing those documents am I now locked in with this company or can I still switch to Guardian if they come back with better costs?

Blindsquirrel

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Re: Help Needed! Closing Costs on my first rental property
« Reply #7 on: March 26, 2016, 07:34:42 AM »
   You can still go with Guardian, no problem. You are not committed until you close and sign the mortgage and the note.
Fellow I have dealt with for years is roverbeck@guardiansavingsbank.com  Rob Overbeck.

Neo

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Re: Help Needed! Closing Costs on my first rental property
« Reply #8 on: March 27, 2016, 08:17:35 PM »
Update: went to the broker who got me the loan on my personal residence and asked him for a quote. Estimated closing costs from him are $1,100 cheaper than the bank I work for. And the interest rate is .25 lower.