Beware of These Junk Fees in Greensboro Mortgage Lending
Many first-time homebuyers don’t realize that junk–or garbage–fees are negotiable. When considering a Greensboro mortgage lending product, it’s crucial to review all of the closing costs and fees diligently. You can reduce or eliminate many of the fees lenders and brokers tack onto a mortgage by asking questions. Another way to avoid overpaying for your mortgage is by working with an ethical, trusted loan officer. At Mortgages by Jill, we never add extraneous fees, and doing right by our clients is our top priority.
Here are some of the most common mortgage junk fees borrowers should look for in their loans.
One typical fee you’ll encounter is an application fee that initiates the loan process. If you don’t see the application fee in the mortgage documents, it’s likely included in the Total Loan Costs. Even when these junk fees are lumped together, it’s crucial to ask for a breakdown as an initial step of negotiating to reduce or eliminate the application fee.
Lenders charge for processing the loan documents. When the total loan costs include processing and underwriting, you can leverage the cost of those fees to eliminate the application fee.
Underwriting fees are one of the ways that lenders pay for the administrative costs of creating loan documents for mortgages. They’re a standard part of the closing costs of a mortgage. Depending on your lender, they can range anywhere from $400 to $900. Not a considerable cost compared to the mortgage total, but these small junk fees can add up to make closing costs skyrocket into the thousands.
Loan processing fees
Loan processing describes all of the administrative costs of the loan. It can be redundant if there is an application and underwriting fee. When lenders are unwilling to negotiate the loan processing fees and total loan cost, borrowers have the option of working with a different lender.
Keep in mind while you’re applying for mortgages, you’re also looking for a lender you’ll work with for the duration of the mortgage, so they should be someone with whom you’re comfortable.
Fees to lock mortgage rates
Mortgage rate lock fees are becoming rarer. Typically, they range from 0.25 to 0.50 percent of the loan amount. A rate lock ensures that you can still access a lower mortgage rate, even if it goes up while your lender is processing your application.
However, you also won’t be able to take advantage of lower interest without a “float-down” provision in your rate lock.
Asking questions about fees and features of your loan ensures you’re not over-paying for the mortgage and can take advantage of all the tools available to you.
If you work with a broker, they may charge you a fee to act as an intermediary between you and the lenders. You can find a lower cost or a broker that doesn’t bill the lender anything by shopping around for different brokers.
Make sure you interview your broker to find one that can meet your unique needs and your budget for closing costs.
Mortgages by Jill finds our clients Greensboro mortgage lending without hidden junk fees.
Get professional, personal, and passionate service when you’re shopping for a mortgage by working with Mortgages by Jill. We have over 30 years and $2 billion of experience connecting clients with mortgage lending products. Jill’s goal is to make home-buying stress-free by providing straightforward, expert guidance and insight. We work across the Triad of North Carolina with first-time home buyers, first responders, and previous clients who want to move into bigger properties.
When you’re ready to buy a home, it can be hard to find trustworthy resources for everything from finding a property to securing a loan. Contact Mortgages by Jill for reliable Greensboro mortgage lending free from junk fees.