"GOOD FAITH" THAT BORROWER IS IGNORANT!!!!!!!!!!!!.Post 26

Hi,


Since we covered mortgages briefly in post 25, let's look at the various costs added to a loan called CLOSING COSTS. They used to be minimal but have grown with time and creativity. Various lenders include fees because THEY CAN and save themselves the EXPENSE OF DOING BUSINESS that we learned about in an early post.

There are some who would take advantage of the ignorant (not dumb-just untutored) buyer (YOU THINK??????). So back to doing "home"work so that the mortgage broker has to finance his own trip to the Caribbean!

Since the mortgage company is not required to hold to the "good faith estimate" of closing costs provided, what does 'GOOD FAITH' mean? Hey!!!!It's probably that the MORTGAGEE has GOOD FAITH that the MORTGAGOR won't know what's really being charged!!!!!!!!!!! Well, that clears that up, doesn't it?!!!!!!!!! Actually, it is an "guesstimate" so get something real in writing!

PADDING closing costs is possible and the fees can rise sharply. Know what is average in costs and it won't end up that way. Don't be a sucker and fall for the GOOD FAITH "bait and switch" tactic. First take a look at the unnecessary fees as opposed to the necessary. You can shop around for closing costs as well as interest rates. Remember, anxiety and vulnerability after a house is chosen causes mistakes, so shop loans beforehand.

A no point, no fee home loan was standard years ago and they're still out there and most of the closing cost fees disappear so that's the first type of loan with advantage. Hard to get but so worth the effort with good credit.

Seek out information on average closing costs for a home in a given price range through computer or other investigative methods offered by legitimate lenders. Use these as examples to get the EXACT TERMS from the lender and escrow company in WRITING.

A MORTGAGE BROKER is someone who does the work of finding a good loan and can be a guide on how to beat costs as well as offer a solid estimate (IN WRITING) based on the mortgage broker's experience with the lender being used. However, remember to check to see if there is a vested interest. For example, a mortgage broker who works for a bank has a vested interest in recommending a loan on which the bank profits the most fully.

REMEMBER IT'S ALL ABOUT SALES AND COST OF DOING BUSINESS. A mortgage lawyer seems expensive until savings on closing costs become evident due to the legal eagle's expertise.

Be aware of what is being ROLLED into the loan. Don't pay interest on closing costs! or taxes or any OTHER costs! Remember the 3X rule of interest over time. Put money aside for full payment.

The work needed to learn about fees is necessary and worth the time and effort. The current average closing costs on the $250,000. home used in the last post can range from $6000. to $23,000. and would include the following:

POINTS: (or loan origination fee=$100. for every $10,000. borrowed) a point is equal to 1% of the amount borrowed; (I PERSONALLY THINK THIS IS A TERRIBLE RACKET but accepted by both sides). It is a charge to actually borrow the money on top of the interest agreed upon.

The following fees are MOSTLY COST OF DOING BUSINESS which THE BORROWER winds up paying for instead of the mortgage company:

Administration fee, application fee; commitment fee (WHOEVER THOUGHT THAT ONE UP?????GOT A RAISE I BET!); Document preparation; funding fee; processing; wire transfer (PLEASE, THIS COST is the same as the funding fee); mortgage broker or lender fee (THE POINTS AND INTEREST AREN'T ENOUGH???);

Tax service; underwriting, appraisal, attorney or settlement fee ( PAYING FOR A LAWYER?) HE SHOULD BE NEGOTIATING THOSE FEES !!!!!!!!!!;

Credit report, flood certification; pest and inspection; postage, courier, Notary fee, (COST OF DOING BUSINESS); Survey (NOT necessary in all cases); title insurance, title work (SHOULD HAVE BEEN INCLUDED IN TITLE INSURANCE COSTS); government fees (YES, THEY GET A PIECE OF YOU AS WELL); county-city fees, sales tax, intangible tax. And there are a few others that some lenders think up that sound legitimate. PLUS YOUR DOWN PAYMENT WHICH IS NECESSARY.


Since the MORTGAGEE came up with this method of making the MORTGAGOR (the borrower) pay most of the MORTGAGEE'S COST OF DOING BUSINESS, it make sense to get the MORTGAGEE (the lender) to pay his own costs. Ask for it!

In a buyer's market, no matter how they drag their feet, it is not only possible but smart business for the mortgagor to go to the table ready to NEGOTIATE and if that MORTGAGEE won't listen, WALK, and let the NEXT MORTGAGEE know you walked on the non-negotiator. Don't be timid. This is a major business transaction. RESPECT will result from your tactics.

There's a lot to be learned about this most important transaction and the Internet is a good teacher. It's all there for the willing student who no longer cares to transact business in ignorance. Keep "GOOD FAITH" by bringing KNOWLEDGE to turn the tables on the greedy and to return to reasonable profits that are deserved by the Mortgagee for risking so much money. The mortgagee is not the only one at fault here. Consent by the Mortgagor is FAULT as well. Make 'em toe the line!!!!!!!!!!! It takes TWO TO TANGO!

CHEERS, CONNIE