Loan Terms and Fees
Renovators Place Columnist
Oct 13, 2009
Wondering how much your home mortgage will cost?
The amount of your "closing costs" - the money you will need in order for the lender to close the deal - can range from $1,000 to $2,500 or more, depending on several factors. Your credit history, the amount of the loan, the loan program and the lender all will help determine your bottom line cost for financing.
When using a mortgage broker, ask him or her to shop around for the best value on home loan closing costs.
Among the typical fees associated with obtaining a home mortgage are:
Here are some tips for reducing your mortgage loan costs:
The amount of your "closing costs" - the money you will need in order for the lender to close the deal - can range from $1,000 to $2,500 or more, depending on several factors. Your credit history, the amount of the loan, the loan program and the lender all will help determine your bottom line cost for financing.
When using a mortgage broker, ask him or her to shop around for the best value on home loan closing costs.
Among the typical fees associated with obtaining a home mortgage are:
- The appraisal fee ($200 - $400)- which covers the cost of determining the estimated value of the property;
- Title insurance ($200 - $700) - which helps protect you against any "clouds" against the title;
- The escrow fee ($200 - $700) - the cost to put aside your earnest money while the sales agreement and financing are processed;
- Document preparation fee ($25 - $125) - the lender's fee to prepare the loan documents;
- Attorney's fee ($250 - $700) - for reviewing the sales contract, negotiating any issues with the buyer/seller's real estate agent or attorney and, basically, make sure you are getting a fair deal and the transaction proceeds smoothly.
- Recording fee ($50 - $125) - county charge for recording the deed.
- Credit report ($25 - $100) - fee for the lender to retrieve your credit report.
Here are some tips for reducing your mortgage loan costs:
- Look for a lender who does an online appraisal, which is less time consuming and, typically, less costly. If the house was appraised within the past year, ask whether that appraisal can be used again, thus eliminating or reducing the fee.
- Pay attention to your credit rating; work to improve it as much as possible, as a strong rating can help lower your home loan rate and fees.
- Some lenders, such as Countrywide, also have loans geared toward those with credit issues. These home loans are designed to secure a loan at a competitive interest rate.
- Ask the lender about removing some of the smaller fees to help you save money. This can work if you are taking out a sizable loan or have financed several homes with the same lender.
- Don't try to skimp on fees by eliminating the attorney's involvement in the home loan transaction. This is your safeguard to ensure that you are getting a fair deal.
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