🚀 go-pugleaf

allenh1@bellatlantic.net (allen) writes:
>It is a rip off to pay for the  bank's lawyer.  Plus of course the
>points. It would be interesting to see who allowed legislation to
>charge the new homeowner the attorney for the bank. 

I don't see things the same way...

First of all, the bank could be charging a much larger "application
fee" and then provide their own attorney for the transaction. So
they don't. Everything is itemized and the cost of providing a
mortgage to you is passed along to you. Big deal. It's just like
every other closing cost you have to pay.

So, you want to minimize closing costs? Find a mortgage that willl
let you roll the closing costs into the mortgage (that's pretty easy
to do...most often it's an option a lender will offer you) or in
a different market, convince a seller to cover them for you.

On the other hand, here is what you could get angry about (at
least I am): the cost passed along to you seems to be price-fixed.
$400 or more for what seems to be maybe a half hour of attorney
time, and of course the hour or so it took his aide to type up
the forms. Or how about title insurance? I was quite surprised
to find out how expensive title insurance is, and even more
surprised when I walked into the closing attorney's office for
the closing, and saw on a separate desk a small sign for the
company that provided the title search. As in, the title search
company shares office space with the closing attorney. Think there
is any price-fixing going on there? I certainly do...

Points, that's another matter. No way no how can they be considered
a ripoff. Simply put, they are prepaid interest, used as a discount
on your loan rate. Most lenders have "no points" loans, and the rates
are higher to reflect that. Points are even called "discount fee"
and "origination fee" and various other things. In lots of circumstances,
such as the case of living in a house, with the same mortgage,
for at least five years, you'll be better off paying the points.
you have a lower loan rate (typically 1/4% for every point that you
pay) so you'll pay less total interest of the life of the loan.

It always comes down to a question of how much money you have going
into a closing and how long do you plan to hold the mortgage, as to
whether or not you can and should pay points. When I refinanced about
1-1/2 years ago, I could have gotten 5-5/8 or less if I'd had the
cash to pay points. Now that it looks like I'm staying in the house
at least 4 more years, I feel dopey for not finding the cash.

Guy
-- 
Guy Klose
gfk@world.std.com