I'm a first time home buyer and looking around for a mortgage. The GFEs I've recceived are
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I have several GFEs and they're all different. My lenders are aware that I'm looking for a loan that doesn't require to pay points so these are not included. But I'm confused as to why some lenders included origination fee and some did not. Is this fee negotiable? and also could someone please explain the whole escrow business? how does it work? how much is initially put down for the escrow? (12 months worth or just a few?) Thanks in advance for your input
I'm a first time home buyer and looking around for a mortgage. The GFEs I've recceived are a bit confusing.To begin with, origination or discount points are pretty much the same thing. 1 point is equal to 1% of the loan amount. Usually what is covered in a point/discount is the ability to buy down your interest rate to a lower rate. When you do not pay any points/origination fees, then your interest rate will be typically a little higher. In some cases it is worth paying the point if you plan on living in the place for a while.
Now as far as escrow. Are you talking about the escrow company that will be handling the paperwork or an escrow account/impound account on your loan.
An impound account will hold a certain amount of months for taxes and insurance. Typically 14 months for insurance. Taxes can range anywhere from 1-8 months depending when your tax cycle hits.
Escrow companies, they are the third party looking out for you. They make sure that everything in the contract has been met and they handle the exchange of the monies.
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