All About Mortgage Loans Closing Costs, and How To Reduce Them
When taking a mortgage and calculating whether you have enough money to buy the house, there are other closing mortgage costs that you must know of before.
Those closing costs can sum up to 2-3% of your mortgage loan, and as most of them are requested to be placed as cash money down payments, you may find yourself far too short from the mortgage and house you thought you could buy.
Except the price of the home which is the major part of the mortgage, there are a many other costs and fees needed to be payed prior to the completing the mortgage deal.
It is up to you to do the best shopping you can do, to negotiate the terms and fees, so you end up in th eover all best deal you can afford. Most of the closing costs are negotiable.
There are many mortgage closing fees and costs, which can change from a person to person, and from one mortgage to another. Most of them depend on your financial ability and the type of mortgage you search for.
Here are the main loan closing costs associated with the mortgage loan.
As sayed earlier you should know most of them are worth negotiating terms to lower the costs.. any thing you manage to save will be deducted from the money you will need as cash on hand payments before the mortgage is even given.
You should shop carefully and examine all the fees and terms prior to closing. It is generally too late to change those fees and terms at closing.
1. The Real Estate Agent fees – It is common that the buyer pays for if he used a real estate agents to find the property he buys.
2. Loan Origination Fee -The money is payed to the loan officer who handled the mortgage deal and worked through the whole documentation process.
3. Mortagage Points - The idea is that when you pay 1% of the loan upfront, you lower the risk or the lender which makes it worth giving you the mortgage interest discount.
Its a simple calculation to find out whether it is better paying the mortgage point upfront or stay with the current interest rate on your loan.
4. Appraisal Fees- The bank will ask independent, certified, licensed appraiser to visit the property and make an evaluation. The appraisal fee covers the cost for this visit
5. Credit Report Fees- While getting your credit score from the bank. It is this credit score that will influence the mortgage interest rate, and the terms of the mortgage loan you will get.
6. Mortgage Insurance Application Fee – You will need in some cases to get an insurance application fees.
Those fees are part of the money on hand you need to keep as part of the closing costs for the loan.