[ST]

...FHA refinance? We are looking to go from a interest rate of 5.5% to a 4.5% FHA Refinance. The current amount owed on our home is $145,875 with the house being worth 157,000. Our new quote that we received was:Origination Charges 4569.39minus a credit of 4119.39 for mortgage insuranceWhich totals $450Now we are putting back on ...$26 for flood certification and $3296.25 for Up front Mortgage Insurancethen add $800 for Title insurance$65 for gov recording fees$566.68 for the intial dep to our escrow acctTotal cost come to over $5,000 for a FHA refinance.Should we be getting any of these charges??? I have a 670 credit score and my husband is 697. Please help!!!

[Corey1023]

It seems from reading your response that I could help by clarifying a couple of items for you.

First, the credit score is used to determine two things: 1. Do you qualify 2. Is there any "Hit" or Penalty to the Rate from lenders.

The rates from lenders are listed in Tiers. They typically start at 620 as that is the minimum score for nearly all lenders currently. From there the next Tier is 660 and the next is 720.

Now, no one can say for sure what your rate COULD be without seeing the rate sheet with the lender that your loan officer is using to price the loan.

As to your question about charges...this really has little to nothing to do with credit score.

Well thats not entirely accurate...let me explain, there is more to this but I don't want to get so technical that I bore you to tears.

Whether your score factors into the charges depends on what you negotiated with your Loan Officer for compensation.

He could be offering you a loan at a rate that pays him zero rebate, but charging you points for that...or he could be simply charging you an origination fee. Your score will determine how much rebate he could earn from lenders, but Front end fee's are really determined by the loan officer or their company.

NOW, there is one last thing that needs clarification. When you say Origination charges...are you talking about the origination fee COMBINED with the other loan costs such as processing, underwriting, credit etc....or are you simply talking about the Origination Fee by itself?

If its an origination fee by itself...then it sounds very high considering your loan amount is in the 150K range and a typical Origination Fee is 1% so even if they had processing and underwriting in that figure I couldnt see it being more than $2500. I'm curious what the break down of those origination charges are.

Everything else looks standard and customary.

Corey Vandenberg

Utah Mortgage Team @
Major Mortgage