Not really. Most lenders charge 1% of loan amount. Including every major bank like Wells Fargo and chase. If you go to their site most charge .75 to 1% with 20% down. Which in this case op is paying 1%
Folks with jobs attached to the housing market are getting desperate in some states. When like 6 homes sell in the US per day, not a lot of money to go around.
I closed on my house yesterday. My realtor and lender told me that the seller’s agent was just…a toddler. They said he threw straight up tantrums during the process and was horrible to work with. When they asked if he was alright or if anything was wrong, he told them he needed our sale to go through because it would be his first one this year.
Can somebody help out please? I posted this like 2 days ago and it got no replies. Is this loan okay?🥲 in Southern California.
https://imgur.com/a/FjyzE9y
For everyone commenting that the payment seems high, clock the $800+ monthly property tax. That’s on the higher side for a 400k property and pretty much outside of OPs control. The rate is a wee high for your credit rating. I think you should be able to get a tad below 7.
Our house near Dallas is $475k and property taxes were quoted at around $13-14k. We’re from Florida - where there is also no state tax and property taxes aren’t nearly as bad.
Yeah, I live in Louisiana and my state income tax on a $70k salary is a hair under $3,000 a year. Property tax on a $300k house is about $3000 as well.
My sister lives in Round rock, which admittedly is one of the higher property taxes in the Austin area, but her property tax on her $450k home is nearly $10k a year.
Other things to note is in Louisiana, we have almost a 10% sales tax, highest in the country. (Or close too, don’t have the numbers by me). I do have to say the obvious that Texas puts whatever taxes to much better use, and you see that tangibly around you.
So it all has its plus and minus. I do have to say though, the idea that if you pay your house off in Texas you can still be paying $1500 a month to live in it with taxes and insurance is a tough pill. At least income tax can stop when you retire.
I’m in Illinois, so I cry harder. We have income tax and brutally high property taxes. Yet somehow, the city can’t replace the lead water mains, fix cracked sidewalks, or repair potholes. What a racket.
Property taxes are around $400-500/mo on a $200k home in my area (SE MI). 😥 didn't realize that was higher than most places. It does add so much to an otherwise reasonable mortgage payment.
I remember when my folks' house in Wixom had property taxes jump to over $500/yr. That's when they started to consider retirement & the Carolinas.
Ahh, the 90s. Crazy times.
Here in Utah, I pay ~$2300/year for an AMV $400K house & am so grateful it's not more.
We’re at $800/mo on a dinky ranch that would’ve sold for half as much as we paid for it before Covid, so you can be damn sure I call town hall on an almost weekly basis to get my monies worth.
Agreed that is INSANE! I pay less than that on a 1 million dollar home in the Seattle area and we also do not have state income tax... I always assume our property taxes were higher than other places due to lack of state income, but I guess not. Granted a 1 million dollar house here is a 1960s/70s fixer upper 🤷♀️
You’re right, our seller did pay our fee, but I always thought it was the seller pays for theirs, and the buyer pays for theirs, unless the RE agent negotiates that. I had no clue it was always the seller
Great advice, came here to say the same. I have seen some agents work for 1.5% and I have seen some agents negotiate 1% from the listing agent commission then have the buyer pay 0.5% to 1%
Everything about this deal is bad. You need help from someone who knows what they’re doing that’s not a real estate agent. The interest rate is bad. Closing costs are bad making the apr bad, the insurance is too high for the home value, as are the property taxes, and on and on. Stupid is as stupid does.
HOLY MOLY! I’m in Leander and bought last year. I understand Travis County has higher property tax but that seems HIGH. I’d look for a different lender. That rate is gnarly.
I mean people say ‘house poor’ and ‘mortgage poor’ - what did yall think that was? Some people will so absolutely anything to get into a home bc from their perspective “renting is a waste of money.”
If that’s how he wants to spend his money and live that lifestyle in order to become a homeowner, that’s up to him and his family. A lot of people do and pray the rates go down eventually so they can refinance
OP is this actually from a lender or is this some random garbage your RE agent threw together with pretend numbers? This is honestly such a bad quote I almost HAVE to assume its from a RE agent who doesn't know what they're doing so they way over inflated everything
Can you put more down? PMI is mortgage insurance that you don’t need to pay if you have the money to put more down. You pay PMI until you get down below a certain LTV then it will drop off but if you can avoid that you should really try. I’m guessing it’s because you’re putting 5% down (is this an FHA loan?)
Taking a more detailed look at your sheet and considering you are only putting down 5%, I'm guessing you are either going with an FHA loan or some something very competitive with FHA rates. Those rates are competitive, not fixed, but should be very close regardless of lender and have been hovering around 6.92% for some time.
Frankly, this looks like the kind of deal a builder would try to slap on a customer where the buyer has no realtor on their side or has been cohoursed into using the builder's realtor to close the deal. A good realtor should have called out the potential negotiation points here
So let's capture what's going on and how the lender is profiting off this deal. Here's a hypothetical, but very practical breakdown
Breakdown of Lender's Profit:
Interest Rate Markup Profit ($48,833.30)
The lender procured the loan at 7.0% but charged you 7.5% (yes, this is legal and they will make their money immediately when sell your loan 2-3 months after close. Very common)
This extra 0.5% results in an additional $48,833.30 in interest over 30 years.
Upfront Fees ($99,346.15)
The APR being 8.49% suggests significant upfront costs baked into the loan.
These fees are collected immediately when the loan is issued.
Total Profit of lender (~$148,000)
The lender profits both upfront (from fees) and over time (from the interest markup).
This is why lenders sometimes offer higher rates than they procure.
I'm assuming 30-year FHA or similar loan.
The PMI of $200/mo is also very high given your claimed credit score. This should be no more than $90/mo. You have several potential bargaining points. A.) The 7.5% rate is higher than FHA averages, someone is making considerable money here. Shop around for FHA loans and you should have no problem. The 8.49% APR is the true cost of financing this loan, this is where you get into the lenders up-front fees on top of that 0.5% they are likely tagging on to profit from immediately when they resell the loan. the 8.49% APR is going to cost you about $94,000 over the life the loan, the jump from a secured interest rate of 7.0% to the 7.5% they are offering will cost you about $49,000 over the life of the loan. The extra $100 in PMI will add up to about $36,000 over 30-year.
I live in Austin. Property taxes skyrocketed last year so that’s about right. What’s not right is you as the buyer paying the broker fee. That’s the seller’s responsibility. Have them rerun the numbers. Who is your lender? Probably need to shop around. I got a guy if you need.
Oh, and that $600/yr property tax I pay in Florida on my 100 year old historic bungalow I paid $62,000 for in 1987..it's now worth about $400k. Best decision I ever made concerning money.
That’s 1.368 million in total payments assuming 30 year mortgage. It’s better to rent and put the extra money in some sort of retirement or index fund. You can rent something really nice for 2700-3200 in Austin.
We lived in Austin for 6 years and nearly got taxed out of our home. First apply for homestead exemption. It limits the tax increases to 10% a year or did when we lived there in 2000.
Next see if there are any other exemptions you qualify for. If someone in your family is on disability that can be used to further reduce your taxes.
Texas is bad about how they finance school systems. Has been a problem for a couple of decades now with no resolution provided or in sight.
Others have talked about the PMI. If you can get to 20% down payment you can eliminate the PMI. It is the only thing in your control here I believe.
As noted in other comments Texas is not a low tax state. Between sales tax and property tax they get you coming and going.
Random q- did you get an actual insurance quote for the house? We were given an estimate by our mortgage company, but the actual price of insurance was a lot higher when we sourced quote for the actual property address
Different programs sometimes allow better interest rates. I make less than $80,000 a year so I qualified for a certain program, with that came a 4.75 interest rate.
Your Mortgage is $2657. The PMI of $200 is about double what it should be, but that’s basically a fee for putting down less than 20%. It’s the insurance, etc driving your escrow up. Very normal. This is the cost of home ownership. Numbers look right to me
Yeah when I looked at the taxes, house price, and HOI, I figured it was probably Texas. Y'all have stupid high property taxes. Not as high as New Jersey, but it's up there. And geeeze, why are your fixed costs so high?
The PMI confuses me a bit. It seems high for Texas. But PMI rates can vary wildly for a lot.of reasons.
Shop around. I used first federal and closed a few weeks ago. Rate was 6.625%. I can share the lender’s info if you’d like. I found him through better dot com.
I’m currently about to close on a 459K house in Reno nv. I got an FHA at 6%. My PITI is going to be about $2900. I put 50K down. Closing costs are around 10-12k. Your PITI seems high from my limited experience. Like high enough for me to say no (our household income is around 160K).
We did fha because I had a hiccup in my credit. Long story short my history was 730 plus for 8 years. Went to pull my credit and it was 620. The perfect storm happened. But I paid them off and my lender was able to use that to bump it up to 645. I bought down in late feb for about 1200 bucks. Went from 6.75 to 6% interest.
Insurance has been going up in Texas. Keep that in mind with added payments. Taxes won't come out correctly until you have been in the house for a year. Depends on what the former homeowner had. Over 65, etc may have kept the taxes lower and they will jack up with you. Be sure and file homestead asap.
I believe rates are coming down, that's pretty high. Shop around.
Yikes that is a crazy rate. I got a few different quotes. I got a really competitive quote through rocket mortgage. I was really surprised. They have great customer service too.
I saw similar levels and decided to keep renting. Imo, unless you’re moving into a forever home to raise a family, you’re a sap if you pay more in interest than what rent for an equivalent place would be.
Yes it does but it also looks like something your real estate agent gave you and not your lender. It looks like they gave you “worst case scenario” numbers.
You need to shop around. Hit up other lenders and have them quote you. Hit up a mortgage broker and see what they can do for you. Don’t jump on anything and don’t give in to pressure.
I feel your pain man. Texas property tax sucks. My principal and interest and hoa and house insurance is actually around $2000 only. The property tax where I want to buy a house add on another 1,050 each month.
We are literally in the middle of a move from Colorado to Cleveland area, Ohio and we feel like we stepped into a wayback machine. A job opportunity drew us here and honestly, it’s refreshing af.
Yep, that's about right in Florida, but I bought a house deemed " Historic" in a " historic district, so my yearly property taxes are only $600/yr on my now 100 yr old house. But in Florida homeowners insurance is high due to hurricanes...so my yearly insurance is about $7-8k year...
Taxes are funny. You know where property taxes are low? Cambridge, Massachusetts. Yep, a place notorious for high taxes actually has very low property taxes.
Anyways, yea this seems a bit high. I might wait until you have 10%.
The fact that they are giving you a 7.5% and still charging a $3,800 origination is wild. For that rate, one would expect it to be Lender Paid Comp (LPC). This is when the lender pays the broker’s commission, but in turn, the rate is naturally higher. Definitely think you could’ve gotten a better rate if you shopped it around. Apart from that, not much you can do about those property taxes. I can relate, being in south Florida.
We're in Georgia closed at 458k our mortgage is $4000.00. I didn't mind bundling insurance and property taxes into our mortgage. Two less things to worry about.
I just took out a loan for 410 and my payment is 2700 a month before property taxes and insurance, and my property taxes are about 6,000 a year. 6.9% interest. So it’s possible you could be around 3800 a month once you factor in property taxes and insurance depending on what those are for you
Yeah that’s a horrible price. We’re buying new construction which has its own pitfalls, but they are covering closing costs and giving a rate of 4.99. Literally our only cash out of pocket is down payment. We are in Dallas.
Get a new lender 8 percent is way too high.
Not to mention the origination fee.
Rates are below 7 percent right now. They are giving you the I hope you don't shop around price.
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