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16 September, 18:15

A lender estimates the closing costs on a home loan of $50,000 as listed below. If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not?

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  1. 16 September, 18:47
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    They are not a reasonable amount since the total estimated costs were $3,100 which represents 6.2% of the total mortgage loan. That number is way too high, usually closing costs are between 3-5% maximum of the mortgage loan.

    Explanation:

    Closing Cost Charge

    Loan origination $200

    Title insurance $530

    Attorney's fees $600

    Appraisal $265

    Inspection $575

    Recording fees $130

    Escrow $800

    total closing costs estimated by the lender = $3,100 which represent 6.2% of the mortgage loan
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