Negotiating Your Way To An Affordable Mortgage
If you are in the process of obtaining a mortgage you should know that there are a lot of fees that you can negotiate to make your mortgage even more affordable. When it comes to your mortgage you should not be afraid to negotiate, as these are fees and such that you will be paying on for as long as 30 years.
Other fees are those that you will have to pay as a part of closing costs and anyone who has ever bought a house knows how fast closing costs can add up. Many a new homeowner has suffered a serious case of sticker shock when they show up at their closing.
Negotiating Your Fees
When you negotiate your mortgage fees you can save hundreds, thousands, or even tens of thousands of dollars. For this reason, you should seek to negotiate every possible fee that there is. Many consumers believe that just because the fee is printed out that it is something that they have to pay, but this is not true. When you receive your mortgage quote or good faith estimate you should pour over it with a fine tooth come.
One of the main areas that you will want to focus on is the lender and broker fee. These fees are often broken down into points, for instance a $500,000 loan that will charge you two points as a broker means that the broker is receiving $10,000 for the work on your loan. Does the broker really need to make this much? Probably not, but unless you negotiate he will!
Another area that you will want to look at is if you are being charged to buy down your loan. Many lenders allow for you to pay to lower the interest rate of your mortgage loan, but you should look at this and see if you cannot negotiate down the charges or do away with them altogether. You may also find an origination fee, which is basically a charge to you for borrowing the money, but aren't you already paying interest?
If you see an underwriting or document drawing fee you should know that these are probably not negotiable. These are often charges that are set in stone, but you need not worry about these charges as these are not the big ones that will make a huge difference. Be sure to look at all of the big numbers, as these are often the ones that can be negotiated down to help you achieve a more affordable mortgage and closing process.
Many lenders take advantage of the fact that most consumers do not know that they can negotiate fees associated with their mortgage and so they will charge as much as is possible. You simply need to carefully look over all your estimates and ensure that everything looks right, at least to you, if it seems high, it probably is, which means that it is probably negotiable. Don't be afraid to ask, the worst thing they can say is no. And that is not a big deal.
Other fees are those that you will have to pay as a part of closing costs and anyone who has ever bought a house knows how fast closing costs can add up. Many a new homeowner has suffered a serious case of sticker shock when they show up at their closing.
Negotiating Your Fees
When you negotiate your mortgage fees you can save hundreds, thousands, or even tens of thousands of dollars. For this reason, you should seek to negotiate every possible fee that there is. Many consumers believe that just because the fee is printed out that it is something that they have to pay, but this is not true. When you receive your mortgage quote or good faith estimate you should pour over it with a fine tooth come.
One of the main areas that you will want to focus on is the lender and broker fee. These fees are often broken down into points, for instance a $500,000 loan that will charge you two points as a broker means that the broker is receiving $10,000 for the work on your loan. Does the broker really need to make this much? Probably not, but unless you negotiate he will!
Another area that you will want to look at is if you are being charged to buy down your loan. Many lenders allow for you to pay to lower the interest rate of your mortgage loan, but you should look at this and see if you cannot negotiate down the charges or do away with them altogether. You may also find an origination fee, which is basically a charge to you for borrowing the money, but aren't you already paying interest?
If you see an underwriting or document drawing fee you should know that these are probably not negotiable. These are often charges that are set in stone, but you need not worry about these charges as these are not the big ones that will make a huge difference. Be sure to look at all of the big numbers, as these are often the ones that can be negotiated down to help you achieve a more affordable mortgage and closing process.
Many lenders take advantage of the fact that most consumers do not know that they can negotiate fees associated with their mortgage and so they will charge as much as is possible. You simply need to carefully look over all your estimates and ensure that everything looks right, at least to you, if it seems high, it probably is, which means that it is probably negotiable. Don't be afraid to ask, the worst thing they can say is no. And that is not a big deal.
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