Which Florida Home Loan Fees are Justifiable?
As you keep an eye out for predatory Florida home loan lenders, it’s important to remember there are many legitimate professionals in this field. With that in mind, consider which mortgage fees are perfeftly justifibable for these lenders to charge.
While some charges tacked on to a Florida home loan contract are unncessary - imposed on ignorant borrowers in order to milk as much cash as possible - the following are examples of fees that are typically and understandable, along with advice on the process …
Finding a fair Florida home mortgage loan
Start shopping among at least a handful of lenders for a so-called “no cost, no fee” home loan. In today’s housing market - with rising Florida home loan rates obtaining a fixed-rate mortgage is a great idea … unless you’re certain you won’t remain in a house for more than five years.
In this case, an adjustable-rate mortgage (ARM) for five years can save you a few interest dollars. But be certain it does not contain a prepayment penalty or negative amortization (where the interest rate adjusts monthly or semi-annually and unpaid interest is added to your loan balance).
If you are dealing with a direct lender, such as Wells Fargo, Bank of America or Countrywide, the lender’s good faith estimate must reveal all loan charges. But you might be asked to pay legitimate fees to third parties, such as for the appraisal, credit report and lender’s title insurance fee. That’s fine. Those are not junk or garbage fees.
However, if you are dealing with a middle person, such as a Florida home loan broker, his or her written good faith estimate might be less reliable. The reason is the broker often says, “I got you the best mortgage, but the lender imposed these unexpected junk fees at the last minute. Take it or leave it.”
Watch out for unnecessary, 100 percent pure lender profit, previously undisclosed junk or garbage fees with creative names such as underwriting fee, document preparation fee, Florida mortgage loan review fee, warehousing fee, and loan origination fee.
If the lender asks you to pay a loan fee of 1 percent or 2 percent of the amount borrowed, usually called points, ask how much reduction you will receive in the loan’s interest rate. For each one point loan fee paid, you should receive at least a one-eighth-percent reduction in your loan’s interest rate for the life of the mortgage.
Pay a loan fee only if you expect to stay in the house at least 10 years. Otherwise, take the no-cost, no-fee Florida home loans with all lender charges included in the interest rate.
