Tips on negotiating closing costs for a refinance?

Question

We're seeing an origination fee of 1% and lender fees between $1100-1350. I'm thinking the 3rd party fees (i.e. appraisal, closing attorney, title insurances, GA state fees, etc.) will be between $1-2k.

Any tips on how to reduce the closing costs?

Any tips on how to reduce the closing costs?

Kristen Nguyen · Answer

@Chris Mason ahh makes sense, thanks for the great info!!

Kristen Nguyen · Answer

@Brandon Roof thanks for the great info!

Chris Mason · Answer

You can of course swap rate for fee, and fee for rate.

Note that smaller loan amounts are priced worse. Revenue is predicated on the size of the loan, but expenses are relatively fixed. Waiving a flat $1350 fee is super easy... provided you're borrowing $750,000. If this is a little $50k Georgia loan, good luck.

Brandon Roof · Answer

Generally, the more you can bring to the table as an incentive to them may help.  Granted, some of the things I'm about to outline may not be very feasible for most:

- Bring a giant chunk of capital to their institution whether it be in the form of a business checking account or CD.  You may be able to work out terms on a six or 12 month CD to park $100k+.  Again, this is likely impossible for the average investor here, and even then are you willing to set that kind of money on the shelf that long in order to save a couple grand?

- Simply ask.  I would imagine they will be more inclined to provide you a favorable outcome if you have a longstanding relationship and have worked with them on several mortgages, loans and lines of credit over the years.

- Get figures from multiple providers.  If you don't like the fees from one lender, continue to look for another that can provide the same service for less, then return to the original lender and bring your other options to their attention in hopes to drive costs down.