San Diego, California
Telephone - Cell:
(619) 300-8819
Facsimile:
(619) 229-0048
E-mail:
Click here to
email Bob
Copyright © 2006 by
Bob Schwartz
San Diego
real estate broker
Certified
Residential Specialist
Promotions Unlimited
All rights reserved.
You may reproduce materials available at this
site for your own personal use and for non-commercial distribution. All
copies must include this copyright statement. |
|
Real Estate --- The good faith estimate
You have recently completed the process of investing in your brand new
home. In the morning you have the exciting task of picking up the keys and
undergoing the closing process. However, don’t get too excited yet, you
should be prepared by following a checklist before you close.
The first thing you should do is look over the good faith estimate. You will
be given one of these to let you know what monies you should have with you
at closing. You will want to go over every line to make sure the figures are
correct. It is time to redo the math to determine no mistakes were made.
This can happen and so can so many other things.
The good faith estimate is provided to you within three days of applying for
your loan. There are basically three elements on this document. The loan
fees, the interest rate, and the points. It is the fees which you want to
take a close look at when going over this document.
There are so many fees the lenders charge it is almost scary. You have the
typical loan origination fee. Then you may have a processing fee, a
registration fee, a document preparation fee, and many more. You can ask for
each and every one of these fees to be discussed, reduced, or even done away
with when it comes time to actually sign the loan paperwork.
The lender will most likely state that this is just company policy and the
fees are normal charges. It is these fees which can cause appalling
surprises at the closing table. The good faith estimate may state your
closing fees will only amount to $1,800 or so. When you get to the table,
the fees have jumped to over $2,500. Unfortunately this happens more and
more often these days.
The lender will lock in the interest rate and the points cap to ensure you
will use their services to acquire the loan. In actuality, it is the
lender's fees which should be locked in place. These are day to day fees
which may be necessary to pay and yet do not change a great deal over a
short period of time. Yet from the time you apply to the time you close the
processing fee went from $150 to $350. When you ask why you are told that is
the fee the bank is now charging. The question should be why is there a
processing fee when there is a loan origination fee? This is something most
buyers will just assume is a natural thing and choose to pay it to save
face. It is not necessary to do that.
When you speak with a lender, you can ask to have each fee broken down so
you can understand them. Many times when you do this and start asking
questions, the loan officer will adjust the rates and keep the fees more
simple. This will ensure you get the actual good faith estimate you are
supposed to be given. When you are all done negotiating with your lender, do
one other thing. Get it all in writing. You do not want any more surprises
at the closing table. By making the lender put in writing exactly what they
are going to charge you for each service, and making them list each service
individually, you can save yourself quite a bit of money at the closing.
Money you can spend on the new home you just bought.
Back To San Diego Information |
 |
