You Can’t Always Get What You Want
On July 4, 1969, The Rolling Stones Introduced their song “You Can’t Always Get What You Want”. The song goes on to say, “But if you try sometimes, well, you just might find, you get what you need.” This can be said about many borrowers trying to negotiate closing cost fees with their lender. Closing cost fees are made up of numerous charges such as lender fees, credit reports, appraisals, attorney fees, lenders title, owners title, recording fees, GA intangible taxes, HOA initiation fees as well as HOA prorations and others.
I had a call the other day from a client who wanted me to lower the attorney fees and totally take out the lender’s title insurance fee (required by all lenders if the buyer/borrower is getting a mortgage and the closing attorney charges this fee). Granted, most folks believe that the lender controls all these fees, but this is simply not the case. I explained to the borrower that the credit report and the attorney fees, title charges, and State transfer/tax fees are 3rd party charges that are “pass-through” charges that we estimate for them on the initial Loan Estimate. The actual charges will appear on their final closing statement. Ironically, the borrower/buyer chooses most of these fees when they agree to a specific closing attorney in their contract, as the attorney determines those fees. The lender can only control their bank/broker charges, such as origination fees, discount points, underwriting, document preparation, and other fees shown in the origination section of the Loan Estimate. When buyers/borrowers are shopping fees from lender to lender, they should focus on the “origination” charges shown on the Loan Estimate only. Most of the other fees will be the same at closing as the lender does not actually set them. Despite the varying estimates from lender to lender for title, attorney, and recording charges shown by different lenders, they will be the same at closing since the closing attorney chosen in the contract will produce those numbers.
So, who do you trust for the most accurate estimate? Great question! Most buyers/borrowers are recommended to a lender(s) by their realtor or friend(s). Trust them, especially a realtor who has done business with this lender and has seen a track record of delivering what they estimated and excellent customer service. Getting estimates from out-of-state lenders can be dangerous if they do not close many loans in Georgia and go by what some chart in their office tells them to estimate for those charges. Your Georgia lenders do this every day and know what the estimate should show, not to mention they do not want to let the real estate agents who referred you to them down. These lenders also depend on repeat business from the agents, and they won’t get the next deal if they don’t deliver excellent customer service, including getting the funds to close right. Trust your referral. In most cases, purchasing a home is the largest individual purchase you will make in your life. This is not like buying a car or an ATV. However, getting a recommendation from a friend might not be so bad when purchasing these, either.
When shopping for lenders, check their lender fees, rates, and reputation (Google Reviews is one place to check). Everything else has pretty much already been determined either by the closing attorney chosen in the contract, the County you are buying in, or the State of Georgia when buying in GA.
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
Thank you for reading this blog. I hope that the facts and insights I share provide value to you.
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Blog post date: Friday, April 26, 2024
