The Loan Process & The Art of Negotiation

It’s a sweltering summer so far with temperatures reaching 100 degrees nearly every day! It’s currently 104 degrees Fahrenheit and feels like 113 outside! I am coming to you live from my air conditioned living room 🙂

We start the loan application today for the mortgage of this home. Since we are using the FHA (what is the FHA?) an inordinate amount of paperwork is required for us and by us. Our mortgage broker and his team sent us a list of what is required this morning and warned that this would only get us started. Down the road, they might require something more but this is enough to get the wheels greased up.

Part of the paperwork that was given to us is a document that details what our closing costs will be. Beau and I had a number in our mind for some time now that we felt would be a reasonable amount. We calculated about 3%-4% of the home price, as we saw this written somewhere as a rule of thumb. When we finally saw the actual price of our closing costs, my reaction went a little something like this.

We dreadfully underestimated what those costs would be but we are not walking away without a fight! I am currently in the process of negotiating quite a few line items on there to make the number a bit more palatable. “Filing fees”, “additional insurance”, “expedited rates” and additional “pest inspections” are all under intense scrutiny. These fees alone amount to thousands. This process becomes more and more expensive as you go so it’s a smart idea to keep reserves just in case! Also, I’ve learned to totally not be afraid to bargain. This is your money and additional superfluous fees are added in all the time! I was able to negotiate lower attorney fees simply by asking. Now, we should be able to do the same with parts of the closing costs.

All that rainy day money is coming in handy right now.  

After we submit our paperwork to the mortgage broker his team reviews it and sends back any corrections needed. Then, they submit to underwriting and we become real players in this game.


About Maya

I like words like "labyrinthian," "kerfuffle," and "serendipitous" because they're mellifluous. I love poetry, pumpkin ales, sangria, long summer days, Fall foliage, going out of my way to step on crunchy leaves in October, live music, Jazz, Salsa dancing, theater, film (foreign and indie), the arts (myriad varieties), dance (in theory and practice) and any place where I can sit outdoors and take it all in.
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