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Can You Do Anything About Home Loan Closing Costs

By Victor L. Fahey

The Good Faith Estimate (GFE) is a statement all lending institutions are required to supply to a borrower within three days of a loan application.

This Good Faith Estimate gives all of the fees that will be charged to the borrower when the mortgage closes.

One thing that makes this statement difficult to understand is that there is no standard that all lending institutions use, so they may use different terminology.

This kind of thing makes it hard for the borrower to figure out what he is paying for.

When you receive your GFE, you will have the opportunity to examine these fees in the “Total Estimated Funds Needed to Close” section. In this statement, you will see the fees you will have to cover when you close.

One of the biggest items will be the mortgage origination fee. There are lenders that offer flat fees, but the majority will charge one half of one percent to up to 2 percent. Because of this, this can be a large number, so it is definitely worth checking for accuracy.

The appraisal fee is one of the first fees, and of course, they do have to have an appraisal. Just check with another appraisal firm to see if the price is in line with the going rate. these kinds of things are why the three day review period is given.

The borrower should look over the processing fee. This is money that the bank will get directly, for the trouble of processing your mortgage application. You may see these costs listed separately, as administration, courier, etc. In this area, a borrower may have a little room for negotiation.

Next, examine the underwriting fee. This is the fee of the the bank to review documents to assess the mortgage, such the credit history and earnings information of the applicant. This is the information needed to make the determination about the loan.

Title fees and attorney’s fees are the charges made by a title company or an attorney to handle the closing. You may be able to save money on these fees by choosing your own closing attorney.

If there are mortgage broker commissions involved, the buyer may have to pay them. (If there is no commission listed, this means the lender is paying it.) If you are paying the commission, you can attempt to negotiate this cost.

There are some fees that are prorated costs in connection with the home. For instance, if the seller already paid this quarter’s real estate taxes, he is entitled to a prorated refund of the taxes.

Be careful of charges not shown, but bundled with others. You can ask for an itemized list of those items. Even though the GFE is a declared estimate, the estimate should not be too far from the final. If you are able to negotiate any adjustments, make sure you get a new copy of the closing cost statement for review before the closing.

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Article Citation
MLA Style Citation:
Fahey, Victor L. "Can You Do Anything About Home Loan Closing Costs." Can You Do Anything About Home Loan Closing Costs. 26 Aug. 2010. uberarticles.com. 1 Sep 2015 <http://uberarticles.com/real-estate/can-you-do-anything-about-home-loan-closing-costs/>.

APA Style Citation:
Fahey, V (2010, August 26). Can You Do Anything About Home Loan Closing Costs. Retrieved September 1, 2015, from http://uberarticles.com/real-estate/can-you-do-anything-about-home-loan-closing-costs/

Chicago Style Citation:
Fahey, Victor L. "Can You Do Anything About Home Loan Closing Costs" uberarticles.com. http://uberarticles.com/real-estate/can-you-do-anything-about-home-loan-closing-costs/


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