We are buying condo for 950K (Bay Area) and taking 740K loan(after 20%down payment). 10/1 interest rate is coming to 2.85% and loan closing cost quoted is 19K(Citi Bank). Does this sound ok to you guys? This loan closing coat is pinching me. Can this be negotiated? TC: 160K Edit: Thank you for your inputs. Our family TC is 320K(Base compensation). We didn’t consider stocks and bonuses to buy this house. We are very financially conservative family.
Im guessing 2.85% already included the mortgage point?
What is a mortgage point?
Also I have heard that it is negotiable: someone I know has a chase whatever fancy card, and he used it along with pre approval letter from another bank or something to force chase to reduce the closing cost. Not sure how much reduction he got though.
I get that things are tight in the Bay Area but a 950k property with a 160k TC is insanity. Unless your partner has roughly 150k+ in TC as well and will be paying half the mortgage?
Please check update in the main post!
You should definitely shop around and get additional quotes. Closing costs in general are about 2.5 to 3% and can be as high as 4% depending on the type of the loan.
% of the loan amount
Over leveraged and limited appreciation in the property.
How can you afford this with $160k?
Family TC is 320K! (Just base compensation)
Your interest rate probably has points (I am assuming about 0.8%). You could shop around and get a higher rate (for instance around 3.5%) with 0 points if you want to reduce your closing costs. In the end it comes to whether you want a lower interest rate or lower closing costs.
Also keep in mind that interest rates are rising and your interest seems adjustable and your monthly mortgage payment will likely fluctuate.
Why buy?
Curious why you asked this question.
Rent & Invest > Buy 🏠 (Bay Area)