One way lenders increase their profits on your Santa Cruz real estate mortgage is by charging settlement fees. While many fees are standard and required, others may be negotiated.
Shop Around For Better Closing Fees
The Good Faith Estimate (GFE), as required by RESPA, is presented to you after you apply for a loan to purchase your Santa Cruz real estate. It gives you a heads up as to what fees you should expect at closing.
If you don't like the numbers you're seeing on the GFE, shop around with other lenders. If you were approved for one loan, you can likely be approved for another. Collect comparable GFEs and see how the interest rate, monthly payments, points, and closing fees stack up. Your best bet is to tell your lenders that you're comparison shopping, so they give you the best numbers possible.
Common closing fees you can expect to see on your Good Faith Estimate include:
• Appraisal Fee – Fee for an independent appraisal of the value of the property. This fee often ranges from $350 to $500. Note that payment for this fee is sometimes required prior to closing.
• Credit Report Fee – This is the cost of acquiring a credit report.
• Title Insurance Fee – This is the fee paid to a title company for research and insurance related to the title of the property.
• Processing Fee – The processing fee covers the cost of the person who handles collecting the paperwork, such as credit reports and employment history, for underwriting. Sometimes, the processor is the loan officer.
• Loan Origination Fee – Also called underwriting fee, administrative fee or processing fee, the loan origination fee is charged by the lender for evaluating and preparing your mortgage loan. This fee can cover the lender's attorney's fees, document preparation costs, notary fees, and similar charges.
• Application Fee – This fee covers the processing of an application for mortgage insurance.
All loans have fees; there's no escaping them. If there aren't any fees, the cost of making the loan has been wrapped up in other areas such as the interest rate or points. So as you comparison shop, remember to look at the long-term cost of the loan, not just settlement fees.
That said, with some comparison shopping and negotiation, you may be able to decrease your fee amounts without the price being woven elsewhere into the loan for your Santa Cruz real estate.
Whether you’re ready to buy or need more information before taking the plunge, I can help. Give me a call today at 831.662.6522 or email me at Lauren@LaurenSpencer.com.
For additional information please visit my website at www.MySantaCruzRealEstate.com.