Avoiding Hidden Costs

There are a number of potential hidden costs involved in the closing process which you should be aware of when you are making your final arrangements for a real estate investing deal.

While many of these costs are minor, depending on the technical characteristics of the real estate investing deal you may be able to save anywhere from hundreds to thousands of dollars if you are aware of some common pitfalls in the closing process and how to avoid paying for things that you need not pay for.
During the closing process for your real estate investing deal, the government will require that the other party give you certain disclosures, things such as your HUD-1 statement, and an estimate of the closing costs.
There are a wide variety of fees which come into play around the end of closing, such as appraisal fees, escrow fees, courier and notary fees, origination fees and so on.

Your Good Faith Estimate of Closing Costs is the first form that you will look at in detail. It will help you understand the loan fees which are associated with the closing of the property.
Some of the fees which you find relating to the mortgage loan for the property are negotiable and some are not.
Things such as the credit report fee and the appraisal fee are usually not negotiated, but the mortgage broker fee is – you and your mortgage broker will negotiate for the amount of the mortgage broker fee when you apply for the mortgage loan.
Other types of fees for underwriting, processing, and other parts of the paperwork process may be lowered or removed altogether if you ask.

The key is asking – if you do not ask whether a fee can be reduced or removed you’ll never know, the default action of the mortgage loan lender will be to charge you for whatever they can.

Ask as many questions as you can and you will be able to avoid paying for things that you don’t have to.
Review the other categories of fees which relate to your real estate investing deal, such as the reserves that must be placed into escrow, the up front payments to the lender, the survey fees, inspection fees and title charges, etc.
Make sure that you know what everything is there for and that the amounts are that which you agreed upon.
Be aware of the details and you will be able to avoid paying as much for hidden costs!

*God Speed*
TLD Investments LLC


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