Sat, Jul 04, 2009
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Lender's Or Owner's Title Policy? |
shamund
183 Posts
Member Since: 05/25/2003
Charlotte, NC
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Posted: 11:02 on 12-22-2004
What is the difference b/w the two and which is a requirement?
The reason I ask is b/c my HML has a general idea of closing costs that he will roll into the loan and an estimate of each item. The good faith estimate includes the following:
ARV (after repaired value): $130,000.00
Purchase Price: $65,000.00
Money for Repairs: $19,004.00
Loan Amount: $91,000.00
Interest rate: 18%
Monthly Payment: $1,365.00
5 Points: $4,550.00
Hazard/Builders Insurance: $243.00
Escrow Fee: $300.00
Draw Inspections: $200.00
Title/Attorney Fee: $271.00
Lender's Title Policy: $329.00
Owner's Title Policy: $273.00
Processing Fee: $180.00
City/county tax/stamps
Deed, Mort $319.00
State Tax/stamps:
Deed: Mortgage $182.00
Assignment: $150.00
Total Closing Cost Funded by loan: $6,997.00
Cash out of your pocket at closing: -
Investor profit if sold in 4 months: $33,540.00
Thoughts??
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davehays
566 Posts
Member Since: 10/02/2003
Amherst, MA
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Posted: 11:45 on 12-22-2004
The lender's title insurance policy insures their title to the property while the lien is in place, just like an owner's title insurance policy insures their title to the property as long as they own it.
However, most lenders pay for their own title insurance policy. In this case, you are paying for it, plus interest.
But perhaps hard money is different, but it just doesn't seem right to me that ANY lender would make a borrower pay for THEIR policy. Just my two cents, Dave
p.s. BOTH policies are requirements when buying a property with loaned money
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shamund
183 Posts
Member Since: 05/25/2003
Charlotte, NC
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Posted: 13:40 on 12-22-2004
I see. What about the remainder of these fees? Is this the norm or a little overkill?
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spinwilly
98 Posts
Member Since: 09/29/2004
Austin, TX
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Posted: 21:13 on 12-23-2004
5 points seems excessive to me. Points are generally paid to get a lower interest rate. 5 points to get 18%?
I know this is hard money but 5 points is just a ripoff non-refundable fee the lenders want up front I would guess.
Most banks charge 1 point for a loan origination fee. I can't imagine how $4,550 is used to pay any kind of costs associated with generating a $91,000 loan.
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