As we get ready for what could quite possibly be one of the hottest years for real estate purchasing in Richmond ever, there are many homeowners that are asking us questions regarding their purchase. Once you find out that the home-buying process is not nearly as simple as signing a rental lease, you may feel intimidated, but that’s what we are here to help you with. From qualifying for a loan on up to closing, the steps that you have to go through may seem a bit intimidating. We love to provide the new (and seasoned) home buyer advice on our blog, so we dove into this topic with a fervor. Just like the process of buying a car, you can reach a point during which items become negotiable.
Many have told us that they envisioned just sitting in a room signing off on bullet points one by one, and they did not know that some of the charges are questionable at best. Here are some of the things that you can have a bit of haggling room over, especially if you have very stable income, and a good credit history. When the time comes to look at the closing statement, here are various charges you can fine-comb a little, and attempt to see about a discount on or alleviation of altogether.
Discount Points: These are basically interest that is pre-paid, and are a general item of help to the borrower. It acts as an element that pays down the interest rate, but please understand that is in most cases your option as a borrower. The lender is in a winning scenario if you don’t stay in the home long enough to break even on the interest that is pre-paid, so if you are not planning on staying in the home for five years or longer, it is not wise to pay these down.
Origination fees: These are other forms of pre-paid interest that do not benefit you as the mortgage broker one bit. This is one item that very definitely fattens the profit that is made on the loan. There are many brokers out there that pride themselves on foregoing this fee, but if you are a borrower in the very high-risk category, you may need to opt to pay it.
Admin/Underwriting Fees: If you have a broker for your transaction, you shouldn’t need to pay this fee, because the broker is not doing any actual underwriting on your loan. The underwriting is in most cases done solely through the lender. However, if you are obtaining a loan through a bank that underwrites their own loans, the fee might be warranted.
Application Fee: Brokers as well as banks get credit reports for very low fees if any, because they are daily customers that need to obtain them. If you are seeing charges as high as $40-$50 for the application, you may want to ask questions to try and get to the bottom of it.
Appraisal Fee: This is one fee that is necessary, but you should make sure that it is not sky-high. $200-$400 for the broker/bank associate to get an appraisal on the house is reasonable. You are also entitled to obtain a copy, to have for your records.
Your real estate broker usually always has your best interest in mind, but we just wanted to alert you to some of the items that you may encounter on a closing statement that you could potentially have a few questions about. While you are looking at this list of fees that you may want to keep an eye on, here are some of the ones that are non-negotiable.
Title Fees: these are associated with every loan closed, whether you are using a title company or an attorney. You can definitely shop around for title companies to see which one has the cheapest fees. Generally, there is not a whole lot of difference.
Doc Stamps/Courier Fees: These are fees that everyone pays to assure a smooth closing.
Tax-related Service Fees, Title Insurance, Recording Fees are others that should not cause you any concern when seen on the closing statement.
With just a bit of research, you can gain some knowledge that will guide you in the right direction as far as fees that you see on closing statements. Most business entities out there are doing their best on a daily basis to help you, but some may be looking to maximize their profits. Here at the Wilson Group, we have been thriving based on a promise to make sure that every customer gets exactly what they deserve as far as their home hunt. Call us today to see how we can help with your spring home hunt, and assist you in your life-changing journey!
We are a locally owned Real Estate team right here in RVA, and we believe our motto says it all: ALL ABOUT THE EXPERIENCE!!! We strive to make our client’s need to sell or buy a home, or even their property management needs an overall great experience. Our business model is deeply founded in the fact that it is all about the experience!