How to Negotiate Refinance Fees
- 1). Request documentation to know how much you are being asked to pay. Often, homeowners rely on mortgage brokers to look out for their best interest and skim the details of the loan document. Seek a good faith estimate before closing so you know what are you being asked to pay. "Your lender is required by the federal Real Estate Settlement Procedures Act to provide you with a good faith estimate of the fees due at closing within three days of applying for a loan," explains Bankrate.com.
- 2). Scrutinize the list of fees. "There are three categories of fees you will encounter when you close on a mortgage: fees charged by the broker or lender for services they provide, fees the lender has to pay to third parties for services and fees paid to the government for things such as taxes and recording fees," explains Bankrate.com. Fees banks pay to third parties such as credit bureaus and to the government are not optional, but don't have to be extreme. Research the standard cost of each item and be sure the fee is reasonable. For example, if you can order a credit report for $10, then a $75 fee is unreasonable.
- 3). Ask questions once you've done your research. Some of the "miscellaneous" fees will be impossible to research as they are fees you pay to cover the lender's overhead costs. Request that fees for in-house paper processing be waived as this is the lender's job to handle.
- 4). Review your documents before closing to ensure the agreed-upon adjustments. "By law, at least 24 hours before the closing, lenders must give you a HUD-1 form as the final accounting of all fees charged to complete your loan," says The Wall Street Journal. Compare the updated fees with those from the original Good Faith Estimate. Dispute any new fees with your lender.