Buyers can save potentially thousands of dollars when closing their next home if they are aware of extra fees lenders can add to a mortgage. There are many names for these fees and while every lender will charge you some type of fee, make sure you are not paying more than you need.
Fees also go by the names of loan-application fees, processing fees, funding fees, service fees, email fees, document printing fees, document preparation fees, administrative fees and even PDF fees. Make sure to always do the following when getting a new loan:
1. Inspect the paperwork and learn what is negotiable
Every lender must provide a “Loan Estimate” showing closing costs within three days of taking your loan application. Look closely at the section titled “Origination Charges” as well as the items in “Services Borrower Can Shop For” and “Services Borrower Cannot Shop For” sections. Ask the lender which fees are negotiable.
2. Shop for your money
Here are some tips for finding the best loan value:
- Shop for your money the same way you shop for your home. Look at a number of lenders and ask them what their fees are. Many lenders offer deals and you need to see what other lenders are offering so you are able to make a good decision about the money you are borrowing to buy the home. The money is as important as the home as small differences in costs could add up to thousands of dollars.
- Try shopping a large bank, a small bank, a credit union and a broker, and look for ones that don’t charge you a non-refundable application fee to get enough information about their fees to know if you want to pursue working with them further.
- Watch out for lenders who have low fees but higher rates; it is all about your total costs not just low fees or low rates. And always compare the “annual percentage rate” (APR), which calculates the interest and closing costs.
I have worked with and vetted many lenders and can help you find the right one to fit your needs when you are ready to buy a home.
