Chances are that your mortgage professional and your closing agent are the only people you will see when you get a new mortgage. You dont see all the activities that are involved behind the scene that work together to make your loan happen.
Your home is the most important asset you will ever own. Lenders disburse billions of dollars each year to finance mortgages. So much is at stake in the mortgage industry, that every detail of a loan transaction must be scrutinized — and reviewed – by several experienced professionals. It costs money to write a mortgage. There is no way around it. The only closing costs that your mortgage professional has discretion over are the application fee; the origination fee; the broker fee; and sometimes, the administration fee. All other closing costs are required by the lender or are unavoidable as a matter of law. No Closing Cost Loans
So how does a mortgage company deliver a no closing cost loan? They increase the interest rate that you pay on your loan to a level that covers the closing costs.
Closing Cost Surprises
The biggest potential for surprise at closing occurs when the mortgage professional does not fully disclose fees, points or escrow for real estate taxes and insurance. To avoid closing cost surprises, carefully scrutinize the good faith estimate that your mortgage professional has given you. Does it list all fees associated with the mortgage clearly in terms of money? Does it list the real estate taxes and insurance reserves in terms of dollars? Or does it merely indicate how many months of taxes and insurance youll have to escrow at closing?
Description of Typical Closing Costs
For an explanation of the fees that are typically part of closing costs, see closing costs in the mortgage glossary.