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If you’ve ever applied for a mortgage, you’re almost certainly familiar with a “Good Faith Estimate, ” which gives you a rundown of costs associated with your mortgage. According to a recent sidebar in Money Magazine, the average costs associated with a $200, 000 mortgage (excluding taxes, prepaid interest, and insurance) are $3, 024 (roughly 1.5% of the loan). If you’re being asked to pay much more than that, then alarm bells should be going off in your head.
So what fees should you target when talking your mortgage broker down? Here’s a rundown of types of fees as well as average costs for each:
Just say no to the following fees…
Commitment (rate lock): $371
Negotiate these fees…
Document preparation: $291
Title work: $196
These fees are legit…
Title insurance: $663
Closing attorney: $362
Pest or other inspections: $60
Credit report: $22
Flood certification: $14
So… The next time you apply for a mortgage, be sure to take a close look at the Good Faith Estimate and make sure there aren’t any outlandish fees.