Ways to Save Money on Your Home Loan Closing Costs
by Barbara P. Mulford
Lenders are required by truth in lending laws to give mortgage applicants with a “Good Faith Estimate” (GFE) of the fees involved with closing on the home loan, within 3 days of the application.
This Good Faith Estimate will supply you with all of the components of the mortgage, including the ones you have already negotiated such as rate, points and term, but also items directly connected with the closing.
One of the problems is that there is no benchmark for presenting these costs, and therefore most lenders use different terminologies for the various items, some items might be lumped together by one lender but separated by another, etc.
This makes it hard for the borrower to understand just what he is paying for.
The most crucial section of the Good Faith Estimate is the Total Estimated Funds Required section calgary mortgage rates. This should list the costs you will be expected to pay at the closing.
The loan origination fee is usually one of the biggest costs. Some very aggressive lenders may charge a fixed fee, but most charge a percentage of the mortgage, between .5% and 2 %. This can consequently be a large number, so it is well worth checking for correctness.
An appraisal is required on the home, and the buyer will be charged for this. But you can make sure that their charges are reasonable by comparing it to other appraisal companies. The three day review period allows you the time to do this.
Another thing that will be listed is the processing fee. This is the amount that the bank will get directly, for the trouble of processing your mortgage application. Sometimes these items may be listed individually as administration, copying, etc. Often, lenders can negotiate these costs.
Next, look at the underwriting fee. This is the fee the bank sets for reviewing your application and approving the loan, based on your credit rating. This is the information needed to make the determination about the mortgage.
Title fees and attorney’s fees are the charges made by a title agency or an attorney to manage the closing. These can frequently be lowered if you use your own attorney.
If the borrower is paying the commission, he needs to review the broker’s fee alberta mortgage rates. There will be no broker’s fee on the statement if the lending institution is paying the commission. If you are paying it, you can attempt to negotiate this rate.
Next, examine the fees related to the home itself. For instance, if the seller already paid this quarter’s real estate taxes, he is entitled to a prorated refund of that.
Be alert for charges that are bundled. You should be able to get an itemized list of all charges. The total of the costs listed on the GFE should be fairly accurate. If you are lucky enough to get a decrease in any of your fees, get a new,statement in writing before the closing occurs.
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