Tips to save on loan fees

Fees are generally broken into three categories: Fees associated with the Loan, Title/Government fees, and Pre-paids/Reserves. The title/government fees are standardized and will be the same regardless of who you do a loan with, so will the pre-paid/reserves. Only some of the fees associated with the loan can be negotiated.

In a purchase transaction the seller generally gets to choose the settlement agency and title attorney. Be sure to ask you mortgage broker to double check the fees being charged by the sellers chosen closing agents as this is often a source of dispute at settlement. If you think the fees are unreasonable you may be able to demand a nuetral settlement agent be used.

Keep in mind that if you are able to negotiate a lower fee, you should keep an eye on the interest rate to make sure it does not increase. Some lenders will offset your savings on the closing costs by inflating your interest rate.

Using the same mortgage company (mortgage broker), the same title company and/or the same appraisal company to handle all of your mortgage financing can usually save you a considerable amount of money from fees being charged to you. Many mortgage brokers will provide discounts for you if you continue to use their services for all of your home financing needs along with possibly being able to negotiate lower fees from the other service providers involved.

If you have questions regarding any of the fees you are being charged, do not hesitate to ask your mortgage professional what the fee is for. The only way you will know is if you ask. If you are being charged an application fee, ask if it is possible to get the loan without the application fee. Also, if you are being quoted X amount at one mortgage company, but you prefer another company, ask the other company if they are willing to match the closing costs if you were to bring in a good faith estimate. Often times they will, because they would like to have your business.