Mortgage Fees to challenge?

Question

Thomas N. · Answer

@Sandro Hagenbuch  Thanks.  I'll ask my bank to waive the processing fee and see if I can get a bigger credit.  Can't hurt to ask.

Sandro Hagenbuch · Answer

I've just closed on an apartment and was able to eliminate the bank-own fee (loan processing fee I believe it was called). Honestly though, I have the assumption that a lot of lenders just put it in so that they can tell potential clients that for "such good clients we could waive these fees". Long story short, Chase hat 990USD fee that I would have been able to have waived, and our local lender (that we ended up going with) gave us a credit of over 2k which covered their own processing fee, their lawyer and the appraisal.

That's my limited and very recent experience.

Chris Mason · Answer

You can swap fees for rate, rate for fees, all day long.

Typically most of the line-item fees you are looking at are 3rd party fees. We estimate on the high end upfront and if they come in lower then no biggie. If we estimate low and they jump up, then it's a huge compliance issue.

Merritt Noel · Answer

@Thomas N. I am making an assumption that you are purchasing the home?  If that is the case my guess is the majority of your fees are related to the property taxes and homeowners insurance.  With reference to the property taxes; since property taxes are paid in arrears you will get a pro-prated amount back from the current owners for the length of time that they lived in the home this year.  Regarding the homeowners insurance, a lender is going to require you to pay the homeowners insurance  upfront and it is what is it.

To answer your question about negotiating fees, I would look at the specific lenders fees (i.e. origination charges, underwriting fees, etc) and compare it to an other lender.  This is give you a starting point for negotiation.  That being said everyone on the loan has to get paid one way or another.  And if you have a quality lender there is some peace of mind to think about in the process.   Good Luck!

Andrew Postell · Answer

@Thomas N.   I've shown $30k in fees in New York before and had the customer say "That's way cheaper than the last guy".  It get's a little crazy in New York with all the fees the state charges.  Your fees might be high because your property value might be high.  The only true way to know if they are charging you a lot is by comparing against another lender.  Ask for a "Fee Worksheet" or a "Loan Estimate" and then go to the next lender and ask for the same thing. Now, fees aren't everything but they are important.  If one lender is $100 higher but you feel more comfortable, they close quicker, etc.  it might be worth paying a little bit more for those items.  Also, most lenders are willing to match other lenders offers.  Everything here points to you shopping and comparing.  Even a small % of difference can add up to tens of thousands of dollars.  Shop and compare.  Then you will know for sure.  Feel free to ask more questions if you need. Thanks!

Thomas N. · Answer

@Melvin List - no I didn't go over the fees line by line because I'm sure the loan officer would be very convincing that those fees are non negotiable.  Looking for fees that banks will be willing to waive or lower if I asked. Thanks.

Terry Miller · Answer

I thought it would help with the discussion to have a list of typical line items to reference. These are from the National Association of Realtors:

• Down payment
• Loan origination
• Points, or loan discount fees, which you pay to receive a lower interest rate
• Home inspection
• Appraisal
• Credit report
• Private mortgage insurance premium
• Insurance escrow for homeowner’s insurance, if being paid as part of the mortgage
• Property tax escrow, if being paid as part of the mortgage. Lenders  keep funds for taxes and insurance in escrow accounts as they are paid  with the mortgage, then pay the insurance or taxes for you.
• Deed recording
• Title insurance policy premiums
• Land survey
• Notary fees
• Prorations for your share of costs, such as utility bills and property taxes

Melvin List · Answer

@Thomas N. Did the loan officer go over your fees line by line so you understood them?

Mortgage Fees to challenge?

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