Profile picture for ndirish221

Closing costs

    How can I tell which closing costs on a home purchase are legitimate and which ones can be negotiated or gotten rid of completely?  I am receiving good faith estimates with closing costs on a 310k home purchase ranging from 3500 to 9500 and I am just unsure what i should really be paying.  Outside of points, what fees do i have to pay and which ones are optional?  Additionally, generally, what should those required fees cost? 
  • February 24 2014 - Richmond
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Answers (4)

Profile picture for SellingRVA
As realtors, we always provide a good calculator to estimate closing costs.  Once you find a home you are interested in purchasing, we can give all the pertinent information to your lender and they can calculate the costs more accurately. 
  • March 05 2014
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There are eleven line items on the GFE - the lender is solely responsible for lines 1 and 2, all other fees are third party. This makes comparison shopping fairly easy. Lines 3 through 11 should be almost identical from lender to lender which means all you need to focus on are lines 1 and 2.

Hope this helps?
  • February 25 2014
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The GFE was "designed" to help a consumer figure out the true costs of obtaining a mortgage. Unfortunately, and as usual, the rules made it so restrictive for a lender that they most often overstate the costs. Otherwise, any understatement comes out of their pocket and some lenders take the estimates over the top. There are some charges that a lender cannot possibly know up front this early, such as title fees without an invoice - and these are the lion's share of costs. Lender's will generally quote a hideously overstated amount to make certain that they are covered. Lender's fees, as George mentioned, cannot change. So those are truly fixed.

Best bet is to get a break down of fees in a format that isn't like the GFE (although you will get one once you have identified a property). Don't freak out over the title charges up front. Not that you won't have a responsibility to pay them if they are typical buyer/borrower costs. But, you can't be charged more for the title costs than what the invoice actually is. You will see the invoice for every 3rd party charge, such as title, credit report, appraisal, flood cert, etc. And by the way, you can indeed shop around for your own title services.
  • February 24 2014
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Here's how I work. Once I have the borrower's credit score, estimated loan amount, city, state, and loan program I am able to issue an Itemization of Fees and I accompany that laundry list of closing costs with the day's Rate Sheet. Once a Loan Officer shows you their Rates, there is NOWHERE to hide! It's so simple and yet so many Loan Officers make it so hard. Show the people your lender fees then run a legitimate Itemization then a borrower can decide who to work with. In closing, the rate you chose (not the Loan Officer) will dictate what lender credit you'll get. It's not like the old days when we could hide our hand or not show the borrowers our cards. The truth is, it will all come out later down the line, so why not be straight forward upfront? Just a thought...

Best of Luck with your decision
  • February 24 2014
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