Do you agree that if you don’t look at the closing costs your mortgage broker provides you you can end up paying a lot more than you have to? Just so you don’t pay more than you have to, this article will provide you with 4 ways to minimize your closing costs.
If you look at them, do you get them on a Good Faith Estimate form, like you should (because there’s a law that says these have to be good estimates, that if they’re far below what you end up paying, your broker has to pay the difference?)
Do know how to minimize your closing costs?
Here are 4 ways to do that.
- Examine your Good Faith Estimate and make sure you understand what each fee is for. Seems straightforward but many people do not do it. Sometimes, they do it long after the fact. You must do it before. Preferably a few days before, not minutes before. The closing costs are finalized on HUD-1, a form that you should have in your hands and inspect (compare it against the Good Faith Estimate form) several days before the closing.
- Now that you understand what all the fees are for, make sure you don’t have there fees that you’ve already paid and are not given credit for that. Maybe you paid the appraisal fee upfront. It’s part of the closing cost, should be on the Good Faith Estimate as having been already paid.
- Mortgage brokers (lenders too) have a number of third parties they work with, like title companies. That doesn’t mean you have to use those. For instance, if you have a title company that is reliable and willing to charge you less, work with that company.
- ‘Lender’s Inspection Fee,’ ‘Commitment Fee’ and other such fees. Some exist only so that the mortgage broker or lender makes more money. Others exist so they don’t waste time with tire kickers. Make sure all such fees are absent or waived if there’s a closing.
Refinance closing costs are lower than the closing costs for a first mortgage. They still run into the thousands, you can still overpay by a few hundreds. Make sure you understand what you’re paying and that the HUD1 form and the Good Faith Estimate form are in agreement.
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