Any realtors or mortgage folks here? Need help ASAP.

[Hell Hath No Fury]

On Friday my Mom worked with Quicken to refi her house -- she is doing this to pay off credit card debt (her score is 720). I need to know that what she is being offered is legit and a good deal. They offered her a 30 year fixed at 4.875%, with $9000 in fees. And "they" (Mom couldn't tell me exactly who "they" are) are going to close all of her credit accounts.

What are your thoughts? How did closing all her accounts factor in and who is doing it? Do those fees sound high? Doesn't closing acconts cause a huge ding on your credit report?

Mom is a senior citizen, and I want to make sure she is not being taken for a ride here.

Thanks in advance.

Hell

[ScreamingMeemie]

1. How much did she owe on the house? Was it over half?

Without that info, hard to say. $9000 sounds high but many banks do the "close the account" when you tell them that you're refinancing to pay off credit cards. Did she refinance to the full value of the home?

[Hell Hath No Fury]

2. Not full value -

85%. She owed around 50% on the house. Thanks for your response.

[dr.strangelove]

3. Closing costs vary a lot by state

For example, in NY, the mortgage tax is very high. Closing a large loan can add thousands to the cost to close in NY. The 4.875 rate is the going rate. It can vary a 1/8 between lenders, but thats average for today. By closing out her credit accounts, what they mean is that the refinanced amount will be enough to pay off all those cards and leave a zero balance. some companies will pay those direct and have checks for those cards issued at the closing, others will just issue a big check and you have to pay them off. If "they" are doing it, be careful about giving out power of attorney, its not needed.

good luck.

[pscot]

4. $9000 is way too high

The standard loan origination fee is 1% of the amount borrowed. Appraisal, title insurance, filing and such shouldn't exceed $1500. The interest rate you cited is available now at many banks. She shouldn't have to pay high discount points to get it. This sounds like a rip off. She really should speak to a local bank or credit union, or ask anyone she knows who has bought or refinanced lately for a rec.

[Hell Hath No Fury]

5. Thanks for your responses, folks -

You can always count on DU. :) I'll pass all this info on to Mom. :hi: