- The most effective way to keep mortgage fees from becoming excessive is to obtain multiple quotes. When you obtain several quotes from several different lenders, and let the lenders know you are shopping your loan around, they will realize they must provide you a competitive quote or lose your loan. If one lender can approve your loan, other lenders also can. Use the competition in the marketplace to keep the lenders from charging you excessive fees.
- Once you receive your quotes, negotiate with two lenders. Choose the two lenders who offered you the best quotes, call them and ask them to reduce their rates and their fees. Start with the lender who gave you the second best quote. Tell him what the lender with the best quote quoted you. Ask the lender to beat the other quote you have. When the lender provides you with a new quote, call the other lender and ask him to beat the new quote. Remember, you can negotiate the interest rate and the closing costs.
- Federal law requires that mortgage lenders provide you with a good faith estimate (GFE) within three days of application. The law also requires that the lender disclose to you any changes to the GFE before you close. When you obtain your new negotiating quote, have the lender put it on a GFE and bring it to your closing. If your HUD-1, the final reconciliation form of all of your fees and interest rate, does not match your last GFE, refuse to close until they do match.
- The Real Estate Settlement and Procedures Act, RESPA, is a federal law, that regulates mortgage and real estate transactions. If you believe you have been a victim of excessive fees, or any other violation of RESPA including bait-and-switch and predatory lending, you can contact HUD and file a complaint. You can also contact your state Attorney General or the banking division for the state agencies that license mortgage brokers and lenders and file a complaint.
previous post
next post