| Mortgage Negotiation Explained | | | | -third party charges |
| Doing a mortgage negotiation properly can save | | | | A lender or broker has control over their own |
| you thousands or even tens of thousands of | | | | charges. They generally don't have much control |
| dollars. | | | | over third party services. These third party |
| First of all, mortgage fees are negotiable. Just | | | | charges are charges you are likely to incur |
| because you receive an official looking stack of | | | | regardless of which lender you use. |
| documents from a mortgage broker or lender | | | | Negotiating Mortgage Fees - Areas To Focus |
| doesn't mean you can't negotiate. | | | | The largest area to focus on is the lender/broker |
| You will get your "mortgage quote" in the form of | | | | fees. These are usually described in terms of |
| a good faith estimate. This will outline the | | | | "points". A $500,000 loan that charges 2 points as |
| expected charges. This is not a guarantee of final | | | | a broker fee means the broker fee is $10,000 |
| loan costs. It is only an estimate. | | | | (2% of $500,000). |
| Like most things, mortgage fees are negotiable. | | | | Lenders can charge you to "buy down" your loan. |
| Mortgage fees are structured in one of two | | | | This means you pay up front to lower your |
| ways: | | | | interest rate. They can also charge you an |
| -fixed mortgage fees | | | | "origination fee" which is their charge for lending |
| -variable mortgage fees | | | | the money. This is separate and in addition to |
| Fixed costs are mortgage fees that don't change | | | | other charges they may have. |
| with the size of your loan. If a processing fee for | | | | Many large lenders and brokers have charges that |
| a mortgage is $750, it should be the same | | | | are not that negotiable, such as their underwriting |
| whether the loan is for $200,000 or $800,000. | | | | fee or doc drawing fee. The big fees are always |
| There isn't any difference in the amount of | | | | negotiable, and this is where you should spend |
| paperwork a lender has to do on either loan. | | | | most of your time. |
| Variable mortgage fees are fees that change with | | | | These fees can be negotiated by comparing the |
| the size of the loan. They are typically a | | | | good faith estimates received from different |
| percentage of the loan. A "point" is 1% of the | | | | sources. You can use competing offers as |
| value of the loan. | | | | leverage in your mortgage negotiations. Keep in |
| These are still negotiable charges. | | | | mind that if you exaggerate a competing offer a |
| Mortgage fees are also charged by different | | | | person in the business may be able to tell. Their |
| sources: | | | | job is to stay on top of interest rates. |
| -lender or broker charges | | | | |