(Some) Mortgage Fees are Negotiable!

Everyone knows that mortgages are expensive. Closing costs can add up really fast and you normally have to come up with the money in the case of a refinance. I have been working with a local credit union and I am negotiating the closing costs a bit.

I recently got a home equity line of credit on my house to repay family for borrowed remodel money. It had $0 closing costs and a good interest rate of 4%. It is a variable rate and I believe rates will begin to rise in a couple years. Fixed rates are low too so a refinance in my case makes sense as my current mortgage is at 6% (FHA).

I have to get the appraisal on my house updated as a result. Appraisals are costly and normally are $325. I got them down to $225 since I had one done 3 months ago and nothing has changed much. That's $100 in my pocket!

I am now working on getting them to remove the points on the mortgage. As I do intend to sell the house one day and not live out the entire 30 year term of the loan I am OK with a little higher interest rate as it will save me $720 right now. Points are expensive (and pure profit to the lender)!

It is also good to thoroughly check the good faith estimate. People make mistakes, including mortgage underwriters, and that happened to me. They had me set up for escrow of my insurance and taxes and I had it removed (it is optional in my case). I would rather earn the interest myself thank you very much! That brought down my closing costs since I don't have to maintain a surplus in an escrow account!

As always with a mortgage it is best to shop around. I suggest getting 3 good faith estimates from the institutions in your area offering the best rates. Bankrate.com is a great place to start looking!