Every time I've shopped for a mortgage, I've found that just about all these fees are negotiable. For example, when I told lender 2 that lender 1 only charged 1101 Settlement or Closing Fee of $xx, lender 2 matched it.

I think half the thing is that each one is trying to find a 'hook' by which to distinguish themselves from other similar co's, and will push a low fee for certain services in one place, but be higher in others. I don't think it's rocket science or some evil accountant dreaming up the differences, just a company trying to stand out from the others - after all, there are so many regulations they all have to follow, and if they just stuck to those alone, without tweaking what's tweakable, they'd all have the same customers and no special profit.

I did a refi last year and couldn't understand all the fees they try to gouge you with. Only advice I can give is don't give them any money up front, e.g. application or appraisal fee. Evaluate the total cost of the loan, i.e. consider all the fees and interest rate. One lender may charge a higher interest rate and low/no fees and another lender may do the opposite.

Good luck.

Are you talking to a bank--credit unions---savings & loans=mortgage co. Find out what is legal, max charge and what is negotiable. I truly feel that most mortgage companies will charge you anything they feel they can for any service they want to and any amount. Ask about every fee listed, and why? I am sure somewhere is the truth and lending laws in a state there are limits. Maybe by going to the laws in your state, you can find out. Like jasper stated, give them NO money until you understand everything. Get everything in writing and if necessary talk to the loan officer only, not a person just filling out blanks. Many of the mortgage companies are out of state and may refuse to give information ==make sure they are authorized and/or licensed to operate in your state.

Allison,

I've written so much about this over the years... wish I had the responses all condensed into a nice FAQ (something to do in my "spare time" I suppose...)

BOTTOM LINE;
Trying to "compare" lenders offerings by preliminary GFEs is a completely futile exercise in goose-chasing.

Since there is no regulatory requirement for any degree of accuracy in estimations...
and since even the most honest estimator cannot guarantee the potential for change of 3rd party costs...
and since even the most honest estimator cannot know the rate (or costs/rebates of an estimated rate) in the future...
and since even the most honest estimator knows that clueless shopper will believe DISHONEST estimators, as though they were sincere...

NOBODY can legitimately & honestly deliver a valid, reliable & binding "BID" in advance of you having gone much deeper intot he process... effectively eliminating the ability to change providers very easily by that point.

NONETHELESS... the public will continue to TRY to choose from information they WISH was sincere & reliable...
THEREFORE... most loan providers will continue to dish out these GFEs as though they WERE sincere.

Delivering information that is knowingly unreliable,
AS THOUGH IT WERE reliable,
to a requestor who desires information that is reliable,
but without EDUCATING the requestor that it is actually unreliable....
is what I call "Liar's Quoting."

The public begs for it... and what the consumer demands, the consumer ultimately gets.

Your only legitimate way to eliminate the unreliability is to shop based on the selection of your specific loan professional, and not by the preliminary numbers. That means screening and selecting for non-numeric reasons.

Many people are unwilling or untrusting of this... and thereby end up with miserable experiences from endless frustrations.

My age-old auto-filled rant;
Choose your provider according to preliminary "quotes,"
And you've simply chosen the most successful Liar.

Choose according to character quality, competitiveness,
honesty, and your personal assessment,
And you will set yourself up for the better Experience AND
the better bottom line pricing!

Luck!
Dave Donhoff
Strategic Equity & Leverage Planner

Choose according to character quality, competitiveness,
honesty, and your personal assessment,
And you will set yourself up for the better Experience AND
the better bottom line pricing!©

This is good advice, but how does one determine all this in the short meeting one has with either a loan broker or officer? It is good for long term relationships, but most people here rarely get loans.

Hi Allison,

As Dave mentioned, any of the 3rd party fees on the GFE are likely an estimate on the part of the officer/broker. Settlement/closing, edoc or doc prep, courier, title insurance, endorsements, lien searches and recording are all title/escrow fees and unless the broker is thorough he is likely guessing as to what they are. These fees will be in the 1100 series. In Oregon title insurance companies all subscribe to the same rating policy and should have the same policy rates. This does not apply to settlement/closing.

Origination is typically a percentage of your loan amount. Often it will depend on the loan program you are doing and the amount of rebate or yield spread the broker will receive from the lender. It's very okay to ask how they arrived at the number they did.

Appraisals in Oregon are typically between $400-$450 for a single family, owner occupied residence so that figure being the same is a good thing!

Don't pull your hair out. This is a great time to buy a house!!

Hi Cmarlin,

This is good advice, but how does one determine all this in the short meeting one has with either a loan broker or officer? It is good for long term relationships, but most people here rarely get loans.

1st off, you are entirely correct that most people only get home financing once per 3-5 years... but that is certainly often enough to seek out & find someone you can trust not just this time, but the next several times as well.

(Those who deny or ignore the reality of once per 3-5 years simply haven't owned real estate in the last 10 years... facts are observable, and its an unreversing trend that people change jobs & careers, as well as homes, many times in their lives and the frequency is actually increasing.)

SO... *HOW* to effectively screen & vett a relationship of "trust" in the mere 30-60 minutes of an initial interview?

The answer is initially uncomfortable to some people... but it works. It is this;

Ask PERSONAL questions that go back to the other person's childhood... an dhave them tell YOU about how they grew up from ages 7-12 years old.

Why back then? THAT is when humans are at a social development age when we observe, decide and carve out our ethical values about how we interface with others.

That is the short & sweet "secret"...

Of course, it is so much less personal, and less 'touchy-feely' to simply scan Bankrate.com for the lowest number liars of the day... but we already know the results that generates.

Luck!
Dave Donhoff
Strategic Equity & Leverage Planner

Is a mortgage broker actually likely to answer personal questions about their first crush in 2d grade, or how often they fought w/ their sister?

If someone asked me that kind of question in a job interview I'd walk out.

Hi housenewbie,

Is a mortgage broker actually likely to answer personal questions about their first crush in 2d grade, or how often they fought w/ their sister?

Mortgage brokers are human (some are,anyway ;~) and humans who value relationships tend to enjoy entering into relationships with others who ask (and then shut up and listen) about who they really are, and where they really come from.

The humans who wish to avoid relationships are poor choices for financial advisors.

If someone asked me that kind of question in a job interview I'd walk out.

You'd never make it through the 1st screening at our firm then ;~)

Cheers,
Dave Donhoff
Strategic Equity & Leverage Planner

dave,
This type of questioning might work for you, personally I wouldn't be comfortable asking a loan broker in an interview about his childhood. Or in return I don't want to discuss my personal life when dealing with business issues.
I do understand I am dealing with a human, I prefer to keep personal and business separate. I like polite businesslike relationships.
I don't think of it as avoiding a relationship, but keeping it a business relationship.
Do you send out Christmas cards with your family on it to your clients? I have a loan broker and accountant that does that, seems funny to me for business relationships.
I understand others like the personal relationship, I don't. I don't want touchy feely with a loan broker...
and I don't want to rely on bankrate.com!

Hi cmarlin,

Do you send out Christmas cards with your family on it to your clients?

We have a client base that ranges across virtually all religions, so we try to be as respectful to all as we can in that regard... but, yes, we absolutely share who we are as staff (our company family) with our clients... often several times throughout the year.

I have a loan broker and accountant that does that, seems funny to me for business relationships.

I see a relationship standing on its own, regardless of what the parties involved do with each other. How miserable would it be (in my mind) to be uncomfortable transacting business with someone I love, or "comfortable" doing business with someone I could not.

I understand others like the personal relationship, I don't. I don't want touchy feely with a loan broker...

I'm not sure how you define "touchy feely" (well over 90% of my clients I never get to see, face-to-face,) but whatever works for you is fine.

What I am suggesting is that getting to know somebody via an initial "getting-to-know-you" conversation, especially back to the point in their history when they decided (unconsciously) how they'd socially interact, is an extremely effective way to make sure you are interacting with someone you can trust.

I have learned, over time, that both as a service provider AND as a consumer, it is just too futile, frustrating (and expensive) to do business with anyone I am not highly confident that I can trust personally, and whom I know has a stable emotional constitution. I lay out a great deal of resources and concern for my clients... and I can't afford to spend ANY time (nor my staff-family's time) on people who we can't rely on to keep their word and operate honorably.

There are other ways to try to suss out trustworthiness... but, frankly, they generally take far too long to be functional unless you want to get "touchy feely" over much longer periods of time in order to observe behaviour in various scenarios.

The CRITICAL purpose is to discover whether a person is, at their social, unconscious core, trustworthy and capable of respecting and trusting you.

Simply following a conversational line of interest works fine (this really doesn't have to take longer than 15-20 mins, and the dialogue below is made up... ANY similar regressive line of interest works equally well,);
What do you do now?
What was it you did before that?
Did you study in school to do that?
Have you always done that?
What DID you always want to do?
When did you know that was important to you?

(By this time most folks are back to gradeschool era, but if not,)
What were your interests when you were a kid?
What were the influences then that created those interests?
How many siblings did you grow up with then?
How did they affect your goals & interests back then?
Every family has at lease one "rascal" and one "cop"... which were you?
Did you taunt your older(younger) sibling, or did they taunt you more?
How did you guys get along?
(If more than 2;) How did you manage the politics?
What did you do when you got frustrated (with them)?
Did you ever deal with a situation that really made you angry then?
How did you sort it out with that sibling? How do you guys get along now?
How did you parents manage kids like you guys?
Which one was the disciplinarian?
Did they argue much? What were your thoughts about that?
Are you more like that parent now, or the other parent?

Progressive return questions to come to "now";
How do you get along with your folks NOW?
How do you interface with your sibling(s) now?
What have you learned now that you wished you knew then?

Re-focal question;
So then, what would you like to tell me about your financial outcomes that I need to know at this point?

NOW... I have learned the importance of this, and the critical application of it in real life. I practice this process every single day professionally, but I can certainly (COMPLETELY) understand the discomfort of it if I faced the idea of doing it only once in a rare while.

THE FACT IS, however... when you get used to it, it is SURPRISINGLY comfortable and pleasurable. The respondants to the interview feel heard, TRULY heard (because the interviewer is actually LISTENING,) and virtually everyone loves talking about themselves, who they are and where they came from (EXCEPT for the distrusting... who are EXACTLY who you want to identify & dismiss.)

SO...
A) yes... initially very uncomfortable...
B) ultimately INCREDIBLY engaging and endearing to both participants.

Most will never know how to do this..... very few who are introduced to it will have the courage to overcome their fears and try it enough times to realize the benefits.

If you don't want to... you're not alone ;~)

Cheers,
Dave Donhoff
Strategic Equity & Leverage Planner

Thanks for the dialogue. I appreciate the opinions expressed here.

Allison

"have them tell YOU about how they grew up from ages 7-12 years old.

Why back then? THAT is when humans are at a social development age when we observe, decide and carve out our ethical values about how we interface with others."

Then I'm screwed - I was in 5 different schools in those 6 years, moving all the way across the country every time, completely upending my life each time.

In my mind it is irrelevant - in companies (or any kind of organization) the ethics of the individual participants will mirror the ethics of the people at the top of the company. In the case of an ethical boss, he or she will promote those in the company are also ethical, and will fire those who are unethical. In the case of an unethical boss, the people with ethics will quit or get fired, and those who are unethical will get ahead.

Witness what Mozilla has done to Countrywide...

Hi mfbenson,

Then I'm screwed - I was in 5 different schools in those 6 years, moving all the way across the country every time, completely upending my life each time.

Heh... actually, don't underestimate yourself. HOW/WHERE you lived is irrelevant... what you INTERPRETED about your life at that time, and YOUR CHOICE IN HOW TO PROCEED is the point of the interview.

In my mind it is irrelevant - in companies (or any kind of organization) the ethics of the individual participants will mirror the ethics of the people at the top of the company.

VERY TRUE DAT... which is EXACTLY why interviewing your specific provider is CRITICALLY RELEVANT!

You may never get through the admin labyrinth to interview Mozilla... but you can get one of his loan minions on the phone virtually 24 hours a day! If that's not enough, you can go "upstream" probably at least 2 supervisory levels without any resistance at all!

Certainly not at all unreasonable when we're talking about a 1/4 to 1/2 million dollar transaction that is reasonably to be rebalanced on average around every 5-ish years.

In the case of an ethical boss, he or she will promote those in the company are also ethical, and will fire those who are unethical. In the case of an unethical boss, the people with ethics will quit or get fired, and those who are unethical will get ahead.
Witness what Mozilla has done to Countrywide...

You got it!!!

Cheers,
Dave Donhoff
Strategic Equity & Leverage Planner