Mortgage questions

I know there have been a few posts posts about this but thought I’d ask. I’m moving a property to a line of credit. I’m looking at financing a house for 50k and being conservative worth about 80k. I just spoke with someone and I can get a 30 year fixed at 7%. He told me he wouldn’t make any money on this loan though so would have to charge me a heft origination fee. Obviuosly everyone needs to make a little money but these seem to be quite a bit out of wack. Can anyone tell me what I can expect to see in Indiana right now and offer any suggestions for not getting taken to the cleaners on closing costs…

$1000 origination fee
$300 Appraisal fee
$85 Tax Servicing Fee
$270 Processing Fee
$525 Underwriting fee
$20 Flood Certificate
$75 Document Preparation fee
$250 Closing Fee
$150 Attorney Fee
$100 Recording Fee
Grand Total = $2775

These fees total about 5.4% of the loan amount $50k. Its the size of the loan that is hurting the deal. The lender has to do just as much underwriting for this small loan as he would a $400k loan. Although the 7% looks to be in line with market, maybe a little high this loan has less value to the lender. Having said that, everything is negotiable, tell the lender what you are willing to pay to make this happen. Say 3-4% of the loan amount or no closing costs but pay a higher rate on the loan.

Thanks, thats excellent insight and it helps to understand where they’re arriving at this. I’ll go back to them and continue to shop to see what’s available.

You need to talk to a different broker. It is not your fault the guy is not make any money on this deal. The rate is not altogether horrible for a small loan like that, but 2% origination is not reasonable. If you tell him you will pay 1% origination that will drop your closing costs down to 4.5% which is more reasonable. I try to keep the closing costs for my borrowers to 3% or less.

Personally I feel your getting a great deal.

As many professionals in the mortgage industry will tell you, lower loan amounts are harder for us to earn a fair compensation. Quite a few wont even touch these.

Often times sales professionals must decide early in their career where they draw the line on minimum commission. Some will work for cheap either because they plan to get a referral, just plain need the business, or maybe even they do amazingly high volume.

Im gonna agree with the above post, those closing costs are very reasonable for such a tiny loan and the effort that goes into it!

Do mortgages carry over on tax deed sale properties

Hi I have a question about mortgages on tax sale properties.

I would like to know if when a tax sale property is purchased does it carry over the mortgage a previous owner may have had on the property or if the previous owner is still responsible for this debt with the title being clear?

The reason I’m asking this is because usually the mortgage is secured by the title, not the previous owner themselves.

If anyone knows, Please give some further information that would be greatly appreciated.

Thanks in advance,