Question: What is an average closing cost on approx. 122,000.00 loan? a loan started out to be just a refinancing of a house now it's end cost is 256,000.00 with closing cost of 4277.00, financed amount is only 118,576.00. Does this sound right?

Answer: Depends entirely on your state.\n\nFor example, Florida does not have a state income tax, so they charge heavy taxes on mortgage loans.  \n\nFees are broken down into many parts, and without listing what the fees are going to, it is not fair to make a judgment call on your fees.  If, for example, $3,000 is going to state taxes, then this loan is not very expensive at all.  If, however, $3,000 is going to the broker as "origination", "points" or the like, then it MIGHT be an expensive loan.\n\nIn Ohio, you would expect to pay about $2,300 in the basic, non-broker, related costs.  This includes title, pre-paids, taxes, and insurance escrows.  This would mean about $2,100 to the broker.\n\nIn the scheme of things, $2,100 is not a lot of money to pay a broker - depending on whether they are also getting paid on the interest rate.  Look for a little number somewhere on your "Settlement Statement" called "YSP" or "Premium" or Yeild Spread Premium.  The number next to this (not added in the big column) is the amount the broker is getting from the bank outside of closing for arranging this loan. \n\nIn our example, if this amount was about $1,000, I would say this broker was fairly paid.  Some might disagree with me, but about $3,300 in broker income is average for the industry.  If it is over this, you'll need to consider what you are comfortable paying.\n\nIf you are within 3 days of the loan closing, you have the right to "rescind" the transaction by following the directions on the rescion paperwork.  Follow them closely, as you likely have to fax the paperwork to the lender - not your broker.\n\nIf it is after 3 days, you'll be happy to know you are better informed today than you were then.  You likley will have no recourse.\n\nSee a lawyer if you feel really screwed, but don't rely on the end cost to make your decision.  You can pay off a 30 year mortgage about 6 years early by simply making an extra payment each year.\n\nFinally, if your credit is bad, you should expect to pay more.  It's not that you are getting screwed, it's just people are taking a bigger risk lending you money.\n\nBest of Luck.
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