What are Closing Cost Estimates
by Barbara P. Mulford
When you close on your home loan, there will be certain costs that are connected with the loan, and lenders are obliged to tell you ahead of time as to what they will be.
The GFE should give the entire terms of the mortgage, including the period, rate and points (which most borrowers know before they apply), but most importantly the closing costs.
The problem with these estimates is that each lender uses their own form, so it may be difficult to compare the costs.
This makes it hard for the borrower to understand exactly what he is paying for.
When you receive your GFE, you will have the opportunity to examine these costs in the “Total Estimated Funds Needed to Close” area. In this statement, you will see the costs you will have to be responsible for when you close.
The loan origination fee is usually one of the largest costs alberta mortgages. This fee can vary widely, from smallish fixed fees, all the way to as much as 2% of the worth of the loan. As you can imagine, this can be a big number, and the borrower must make sure he agrees with it.
The appraisal fee is what the lending institution charges for an appraisal on the home. However, you can make sure it is not out of range by calling appraisal companies in the local area and computing the average rate. There is a three day review period, just to give the buyer time to check these items.
Review the bank’s processing xosts. This is basically the time and trouble the bank had to devote to gather all of the information and documents related to the mortgage together. They may list them individually as application fees, copying fees, administration fees or others. In this area, a borrower may have some room for negotiation.
The underwriting fee is another charge on the closing statement. This is the fee charged by the lender to review documents to assess the mortgage, such the credit history and salary information of the applicant. This is the information used to make the determination about the mortgage.
Next, look at the title fees and attorney’s fees. You may be able to cut costs on these fees by choosing your own closing attorney.
Review the loan broker’s fee, if you are responsible for the commission. However, many times the bank is the one to pay these fees. A borrower may have some leeway in lowering this rate.
Fees related to the home itself must be shown on the closing statement calgary mortgage rates. For instance, if the seller already paid this quarter’s real estate taxes, he will be entitled to a prorated refund of the taxes.
Be alert for charges that are bundled. You are entitled to see a listing of all charges. You should be able to expect the ultimate closing costs to be fairly close the GFE, even if it is only an estimate. If you are able to negotiate any adjustments, make sure you receive another copy of the closing cost statement for review before the closing.
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