Closing costs can be a killer but if you are
working with a closing company that is a good one you will have
received many different documents that fill you in on all of the
fees you will be responsible for. The most important
documents are the disclosure ones, it is on these that you will find
all the information that you need concerning the fees. You may even
be charged fees by your mortgage broker if you used one. It is all
too common for people to accept the bills for their fees without
question. This is a great way to lose money since many originators
have simply marked up their prices in order to make even more money
off of you. If you feel that you are being overcharged then you need
to say something. Once you have spoken up the shady originator is
caught and they might be willing to lower their fees for
you.
You will most likely have received a document
called the Good Faith Estimate form.
This form
is to let you know what you will be expected to pay for the
services. When you get the HUD-1 closing statement you will want to
check carefully to make sure that the fees match exactly. You need
to challenge any fees you are uncertain about when you receive the
Good Faith document. If you wait until you get the HUD-1 your sale
could be held up and that could take too long to sort through. If
your sale is help up your could run into some serious -problems with
your loan documents, they could even need to be redrawn.
The first things you are going
to see on your Good Faith estimate Form are the fees that are
directly concerned with your loan. These could be your:
Origination fees or points
These are charges, generally set charges though they could
be a percentage of the loan amount, that you have agreed to pay in
order to get approved for your loan. Some lenders in some situations
are not permitted to charge either one of these charges. In some
cases these fees will be deductible while in others they will have
to me amortized over the term of the loan. Points can be useful
because sometimes if you buy points your interest rate can be
lowered which in the end can save you thousands of dollars. Your
choices all come down to how long you plan on holding on to this
mortgage and which option will save you the most money in the long
run.
Credit report fee and appraisal
fee
These fees will most likely not be negotiable as
some of the others are and they will have to be paid to your
mortgage broker or your lender. Oftentimes lenders have an appraiser
that they work with and they will insist that this appraiser do the
appraising. But if you have an appraiser that will be substantially
cheaper to use you can look into getting them certified, or approved
by your lending company. This is a relatively easy task, just as the
lender about it, all your appraiser will have to do is show them
their certifications. This could save you hundreds of dollars so it
is well worth the trouble of asking.
Mortgage broker fee
This is
one of the negotiable fees that you will run across. When you do
apply for your loan you and your mortgage broker will discuss this
fee and agree upon them. If you feel their fee is too high speak
up.
Wire transfer and courier
fees
When escrow is closed there are fees that need to be moved
around as well as documents. The loan proceeds will be sent to the
appropriate party by courier and that is not free. You can however
ask to have these fees waived or at least reduced and I suggest that
you do. Ask your lender if they can send everything over the
Internet or by some other electronic means as that could save you a
good chunk of cash
