5 Ways to Lower Mortgage Closing Costs
Mortgage closing costs have risen 6% over the past year, according to a recent Bankrate.com report — averaging $2,539 on a $200,000 loan.
But mortgage closing costs aren't set in stone. Especially in today's market, you can definitely negotiate your origination and lender fees. It's like any other service. They have the power to give you a discount, if they want to. Don't just settle for whatever you're quoted for mortgage closing costs when buying a Columbia SC home.
Here are 5 Ways to Lower Your Mortgage Closing Costs
Get Multiple Quotes – Going with the first lender you call is like going with the first car insurance quote, or the first car you test drive — there might be a better deal or car out there. Get estimates from at least three lenders. You're looking for the total package for evaluation—interest rate plus closing costs. You'll generally be able to get those numbers by providing a few financial basics over the phone.
Compare Mortgage Closing Costs Carefully – This may be harder than it sounds, since lenders call similar fees by different names. They may lump certain things together that other lenders list separately, and include and exclude certain third-party costs, such as homeowners insurance. Your best bet is to ask for a GFE, or Good Faith Estimate, which lists each individual fee. It's the clearest way to see what each lender is charging you.
Ask About Fees – Make your lender walk through each charge with you and discuss what it includes. Some third party charges, such as appraisals and credit report fees, are pretty set in stone. Other costs, such as title insurance, legal fees, and rate lock fees vary more frequently than not. (Title insurance varies so much from state to state that some lenders don't even include it in their numbers. It's also something you can shop around for. You're not forced to take whatever quote you're given. Another charge to watch out for: Courier fees. In today's world of technology, unless the lender has been sending papers around for signature via delivery service, you can have this one nixed. Most use email and fax for signatures these days.
Watch For "Junk" Fees – Junk fees are fees a lender will charge that are negotiable, that they can take out or leave in. These might include things like application fees, underwriting fees, and loan processing fees, among others. If they seem vague, they probably are. Sometimes when you question the more ambiguous charges, they can be lowered or eliminated.
Ask for Discounts the Competitor is Offering – Go ahead, pit lenders against each other when getting quotes on your mortgage closing costs. If one lender is offering a deal, ask other lenders if they can match it. You may be surprised when a competitive market results in a smaller bottom line.
So there you have it. Our list of 5 Ways to Lower Mortgage Closing Costs when buying a Columbia SC home.
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