Tuesday, March 20, 2012

Closing costs?

Guess how much NVR wants in closing costs when you put down 10% on a new house.  $15000 for 4% and $13000 for 4.25% interest rates. And if you want to finance your PMI as a single premium into the loan, not only will NVR increase your loan amount by the premium amount, they also charge you the premium up front at closing. Yep, you pay it twice.  And according to Dennis Vo, assistant manager, that's why financing isn't a good idea.  Nothing like adding $7k onto the loan AND paying $7k up front.

So you know that $11000 incentive Ryan gives you for using NVR?  Seems they just rape you in closing costs to make up for it.  Just thought you guys should know.

4 comments:

  1. Is this a huge change from your Good Faith Estimate or is this what you've been told all along? Our GFE from NVR was pretty comparable with a quote from another mortgage broker.

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  2. yes. this is a huge change. we did increase our home cost by $20k from the GFE, but where we are getting confused is the PMI - paid upfront and then paid again in addition to total closing costs; essentially 14k is paid PMI, with 10k put down already. maybe we're just in the dark about this, but on our current home closing costs were <2k and it was a new build...bought from the builder with their mortgage company, and monthly PMI. We spoke with another lender on the phone today, and said that his closing costs would be ~$1,100 w/ a 4% interest rate and just <5k for PMI paid upfront (if PMI is based off of credit scores, why is it different between lenders?) I'm so confused and frustrated.

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  3. We we were told by NVR that with an FHA loan you could not buy out your PMI. They said that it was a new rule that went into effect when they lowered the lending limits across the nation last fall.
    We decided that we wanted to finance as much of the closing costs as we humanly could in order to have less money to put down. It seemed like it made way more sense because rolling in 10k in closing costs only increased our monthly payment by like $30. Granted we pay that over 30 years but it keeps money in our savings account to install a deck, fence, paint, etc.

    Not sure if you are doing a conventional loan or if it differs but we qualified for both an FHA and Conventional and were told that FHA offers way better rates. I'd look into financing your closing costs if possible

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  4. Just FYI our house cost $230K, we rolled in 10K in closing costs taking the final mortgage amount to 240K, we put the 3.5% down required by FHA (which was $8400) and thats the only money that came out of pocket, like legit thats it. We wrote them a check the day we signed our contracts and not a dime more will be due, in fact at closing we are getting some back. Our monthly payment is $1860 which does include $212 PMI (painful but it'll go away in 5 years)

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