A mortgage is never free. There is always some cost attached to getting a loan from the financial institute. It varies depending on the various conditions. The cost generally paid by the borrower, but it can be transferred to the lender as well. For that, you must have an understanding of the terms and good negotiation skills to convince the lender to bear the cost. The amount will be depending on the loan type, your type of lender, the mortgage rate in the industry, etc. It is not mandatory that you have to pay the mortgage closing cost. You can discuss with your lender and ask them to withdraw the cost.
Generally, when you get the mortgage from the financial institute, they will provide you the terms and conditions of the closing. You can read the document and decide the closing cost rules given by the company. Many mortgage lenders keep the flexible closing terms to make the borrower comfortable in getting the loan. You select the term, as per your need and let the lender know about it. Once both the parties agree on the term, you can sign the paper by mentioning your closing terms with them. Always do paperwork before getting the mortgage so you will have proof of the terms that discussed while taking the loan from the particular financial institute.
Instead of paying the SunWest Mortgage cost separately, you can add the closing costs to your existing loan amount. The procedure is called a no-closing-cost mortgage or no-closing-cost refinance. You can ask the lender to include the closing cost of the loan amount in the installment and complete the rest of the closing procedure.
However, in such scenario, you might have to pay the higher interest rate compared to the normal mortgage loan. The mortgage lending company recovers the closing cost of your loan by charging small fees on a monthly installment. You do not have to pay the closing cost in the large amount at the end of the loan tenure. It will be deducted from the monthly installment over the life of the loan.
There are only two ways to deal with the closing cost.
1) The mortgage company completely waives the closing cost on your borrowed loan. This is a very unusual case in the mortgage industry, but there are, many financial institutes in the country who provide this kind of service to attract more borrowers. Ask SunWest Mortgage while taking the loan you can ask about the waiving the closing cost on your total loan amount.
2) In most cases, the lending company will present the rate of the closing costs while lending the loan. If you do not want to pay the closing cost, then you can go for a slightly higher rate.
How much closing cost Sun West Mortgage company charge?
The closing cost will be varied depending on the law in the country and the term and conditions of the lending company. It is calculated on the basis of your home value and the loan amount you are taking from the institute. Normally, the higher loan amounts will have the higher closing costs. Your closing cost will be included lender fees on the total loan amount, third-party charges on total insurance, escrow services, etc. Some company charges property taxes and homeowners insurance in advance.
How to avoid closing cost?
There are many ways available to avoid the closing cost. Follow below guide to learn more.
1) Negotiation: When borrowing the mortgage you can have a discussion with the lending company about the terms of the closing cost. Check the rate and calculate the amount to understand how much it will add on top of your total loan amount. While discussing the loan amount, you can ask the lending company to waive the closing cost completely. Not all the lending company will take it positively, but there are many financing companies out there in the market who offers no closing cost.
The closing cost is the additional charges company charge for lending the money. Generally, it includes the processing fees, insurance charges, etc. The company can manage these expenses in your loan amount easily. There is no particular rule for charging the closing amount. It is completely depends on the lending company. If you are lucky enough then chances are you will get the approval on waiving the closing cost on your loan amount.
2) Taking Loan from Financing company: The new financing companies are generally flexible in lending mortgage to the customers. They change their rules if the customer requires any customization in the rate. The new companies are trying to establish themselves as the brand in the market. So to attract more borrowers they offer various kinds of benefit to the borrowers. The closing cost waiving is one of the offers you generally find in these types of companies. While borrowing the loan, you can ask for offers and put your point on the table. The company then checks the total amount and decide whether they can waive the closing cost amount or not. In most cases,the borrower gets a positive response from the company. Although, it completely depends on the company guidelines.
3) Value of property: The value of the property also matters when you apply for the no closing cost offer. The company offers the no closing cost offer only to the person whose assets value is pretty well in the market. The company wants to assure that they can recover the amount in case of nonpayment of the mortgage amount. They keep their side secure to avoid any loss in the future. If the property price is consistently growing then the loan amount that you are taking from the mortgage company will be low compared to the market price of the assets. In this case, the chances are the company will waive the closing cost on your lending loan amount.
Loan from the Mortgage Banker:
The mortgage banker creates the no-cost deal on the mortgage by increasing the rate of interest on the total loan amount. This is generally referred to as “rebate pricing”. The rate of interest of these banks will be little high compared to the other financing companies. In this case, the bank doesn’t charge the closing cost in lump sum amount. Instead of that, the amount is collected through the monthly installment so that the borrower will not have a strain of paying the large amount at the end. This also allows the bank to absorb the borrower’s costs periodically and pay the charges.
Comparing the no-cost loans:
The charges for no cost loans will be same with the bankers and brokers. When taking the mortgage from any financial institute, Ask them for the same structure.
When comparing no-cost loans between bankers or brokers, ask for the same structure of each.
Here are some of the questions that you can ask for them.
– Ask for the no lender fees. Most mortgage companies will have no Lending fees. You can ask them for it and take the benefit of it.
– Ask them to keep the third party appraisal same as per theSunWest Mortgage rate. You can do little research to find out if Sun West Mortgage is offering you the best and lowest rate.
– The credit report will be same with all the financial institute so ask the company to keep the report same.
– The financing company will offer you the different title, escrow and recording fees. You should select the lowest of them and ask them to keep as per industry standard.
– The taxes and insurance amount should be same with all the lenders. If any of them are charging higher amount then ask them to keep it as per the industry rules and take the amount down to the market rate.
By doing this you can keep the other charges as low as possible so that the negotiations on the interest rate becomes easy. You do not need to spend time looking at the various aspects of the mortgage. It saves your time and you can comfortably take the final decision on taking the loan amount from the lending company.
People who are refinancing a home loan with might have to pay the closing costs all over again. You should have a discussion with your mortgage company before taking any further steps. Here is some money-saving guide that will help you in the process.
Waive the appraisal:
Check whether your home has been appraised recently. If it does, then you do not have to pay the appraisal cost again. You can skip this completely and save some money in the closing process. You can ask your mortgage lender company for the appraisal waiver. If you can’t waive the appraisal in one go then you can opt for the automated appraisal instead of paying the full amount upfront.
Save on title insurance:
You can ask for the “re-issue rate” to the mortgage company. It is generally applied when you re-up your title insurance for a refinance.
In conclusion: Little knowledge about the mortgage rules can help you to save some money. There are no free lunches, but with smart negotiation, you can take the benefit of the low rate and comfortable financing options. Follow the above structure while taking the Sun West Mortgage and save on the closing fees.