Origination fees. Title fees. Appraisals. Title insurance. Survey charges. Even postage. All these fees add up to the total cost of homeownership for the potential buyer. While we know those additional costs are there, did you know they are on the rise?
On average, the origination fees (underwriting, processing) from lenders have increased over 10% from last year, up to an average of over $1,500. Third party fees (appraisals, title, postage) have increased nearly 8%, to an average of nearly $2,500. These fees don’t even include property taxes, recording fees and homeowner insurance.
So what’s to blame for this increase? Lenders are saying it’s due to the more tightly controlled mortgage regulations from the government. The strict regulations means more staffing and more resources, which is a cost that is passed along to the borrower. There are now extra steps that the lenders have to follow in the process, more forms to fill out. Lenders are being careful not to do anything that would draw attention from Freddie Mac and Fannie Mae, who now have no tolerance for missing documents or paperwork errors.
Are any of these fees negotiable? Some are and some are not. Lender fees and title insurance rates are certainly negotiable, so it pays to shop around. While things like appraisals and credit report fees are not. It’s up to the consumer to ask the right questions and obtain a GFE – good faith estimate – from at least 3 mortgage brokers and 3 banks.
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