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Washington Mutual mortgage question

Mon Jul 31, 2006 10:07PM | By Tony

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Q: I am buying my first house and the mortgage broker I am working with, told me that she would cover all closing costs up to $2,000, and in the worst case, I would only pay few hundred dollars or so. This is based on her assumption that closing costs shouldn't be more than $2,200 - 2,300 including my lawyer who charges $350. I also gave $300 for the appraisal which is to be counted towards the closing costs. The rate she promised was 6.625%. The problem is I received package from Washington Mutual that outlines the mortgage terms and it doesn't look like anything the broker told me. The closing costs are $3,870, there are some fees that she never discussed with me, and the interest rate is 7.25%. I immediately called her for an explanation, and she assured me that everything is fine, told me to disregard the package. The closing is 15 days away, should I try to postpone it? That mortgage broker was recommended by a friend who did business with her and said she is honest.

A: You mortgage broker is likely honest and there is no need to move the closing. Washington Mutual has been sending those packages for sometime. Few other banks and lenders do it as well. Washington Mutual often shows the worst case scenario - the highest costs to obtain the mortgage, the highest interest rate if your loan rate isn't locked yet, etc. Never sign those papers and don't mail them back to Washington Mutual or any other bank. Shred all the pages as these papers show your name, address and sometimes, even social security number. The closing costs shown are very high, again just to show the highest possible amount. You signed Good Faith Estimate and Truth of Lending as a part of your application. If you don't have the copies, check with your mortgage broker to make sure what the closing costs are and what is included. Judging from your email, she is rather honest and reasonable, and was referred by her former client. I think you should be fine.

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