Yeah, they sold off the load a couple months after we closed. My point was, I was able to get better rates from banks (shopped several) than I was from companies that are primarily mort brokers (shopped several).
Chances are it was sold off the moment you signed the application. It would be unusual for it
not to be. It took a month or two for the paperwork to go through and the new underwriter to start notifying you. And they originated it with that specific underwriter and loan product in mind. The underwriter will not buy the loan unless it meets their product guidelines so the lender, even though it was a local bank, set up the loan from the outset to conform to those guidelines. They are still mortgage brokers, they just do it as part of their everyday banking function and not as a stand-alone mortgage entity.
Is that $800 total paid on the loan at closing, with no other loan costs rolled into the loan? The term "fee" can be used in a loose manner, I have found.
That $700-$800 will be called any number of inane things and is usually made up of two or three lesser amounts in the $200-$400 range. Document Handling Fee, Processing Fee, Preparation and Clerical Fee, etc, it is still the way the lender is getting paid. They also receive a small commission from the underwriter for setting up the loan, though it's not the giant windfall you'd expect.
The loan amount is charged to you at close and will show up as a debit on your side of the closing statement along with the other fees, charges, etc.
People usually run themselves in circles trying to make a particular payment apply to a particular charge or fee. Don't. Look at it as two very large number - total debits and total credits - with any difference between the two being paid out of your pocket.
What most people call a "down payment" is, in the lender's eyes, simply an amount by percentage of house price they want the buyer to pay into the transaction. A buyer with monetary interest in a home is more likely to properly maintenance the debt obligation (i.e. you're more likely to make payments on time rather than risk losing money already invested in the home). Calling it a down payment instead of something like "vesting charge" is easier for buyers to understand. Unfortunately it tends to create confusion at close. Buyers are faced with a big, jumbled list of pluses and minuses when they were actually expecting was specific payments applied as specific credits for each line item.
The actual closing fee calculation are pretty straightforward if you stop thinking "specific payment to specific fee" and start considering it as the sum of many line item debits/credits. Take the sales price of the home, add in all other expenses associated with the transaction - lender fees, appraisals, inspections, insurance, title company and legal fees, etc - and roll it all into one big number. Add up all the credits - loan (usually 95-98% of the purchase price), good faith funds already paid, any seller contribution, etc. - and subtract that from the debit total. Whats left is Amount Due To/From borrower.
In general you will see the FROM box checked. Rarely do buyers get any money back at closing, and then in an amount that cannot exceed the funds they have personally paid in (in other words no cash back in excess of your earnest money). That would be, on paper at least, a cash-out home equity loan using a value in excess of 80% of the value of the home. A federal no-no.
Brad
