You’ve found the house that you want, have arranged financing, and are preparing to go to closing. Several years of scraping by has put you in the position to finally switch from being a renter to becoming a homeowner. Nearly every dollar saved has been set aside for the down payment with closing costs also covered.
At least this is what you would like to think.
Future homeowners are sometimes surprised to find that certain ‘garbage fees’ have been added on to their closing costs. Not the fees to pay the lawyer or the lender only, rather typically smaller, but still costly fees which can add up when tallied together.
If you didn’t pay close attention to the initial estimate of fees you were given when you purchased the home, then your closing costs are probably higher than you had expected. A shocking surprise and a possible hardship as well.
By law, mortgage lenders are required to disclose fees charged in connection with obtaining a mortgage. They have three days to get this information to you once you have submitted your loan application.
The fees listed, however, are only an estimate, meaning your costs could actually be higher.
Points and title insurance are two ‘garbage fees’ most consumers know about, but there are also fees for flood certificate, courier, tax service, notary, wiring, and more. Processing and documentation fees are also charged and your local tax jurisdiction may charge a filing fee too. In addition, if you change the type of loan you want after submitting an application, expect to be charged for that too.
To avoid surprises, make sure that your mortgage lender provides final notification of fees prior to closing. Have duplicate fees removed and, if possible, ask if some (if not all) fees would be waived — many lending institutions are now waiving some or all fees in a bid to attract new business.
Enjoying your new home shouldn’t be tempered by fees which can add hundreds of dollars to your closing costs.
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