Junk Fees Drive Up the Cost of Mortgage Closing
After people stopped listening to the aspirational claptrap about how you could pay down your debts faster by making coffee at home instead of stopping at Dunkin Donuts on the way to work, personal finance experts have begun to focus on reducing the biggest expenses in your budget, such as housing, which is more honest but not necessarily more actionable. Yes, it is less expensive to live in your parents’ house in Alabama than to rent an apartment in New York, even if you live with roommates, but it would involve a major change of career path that could result in you taking a major financial hit in the short term, and possibly also in the long term. Likewise, with homeownership, the biggest barrier to affordability is home prices. Yes, it is cheaper to buy a house or condo almost anywhere that isn’t New York City, but as every New Yorker knows, there’s no place like home. If you are going to buy in New York, the biggest factor in the affordability of your mortgage is the amount you borrow, which means that your monthly payments will be lowest if you place a hefty down payment from the proceeds of the sale of your previous home or a cash gift from your parents. The closing costs only make buying a house more expensive, but many of those costs may be unnecessary. For help getting through mortgage closing successfully, contact a Bronx real estate attorney.
The Five Trashiest Fees Standing Between You and Homeownership
While there is no formal legal definition of a “junk fee,” the Consumer Financial Protection Bureau (CFPB) uses the term to refer to fees that do not pay for a service that is valuable for the customer. In other words, the consumer is not buying something; rather, the seller is charging you money just because they can. Think about those “processing fees” that vendors often tack onto online purchases, and you will have an idea of how useless junk fees can be. Given that you pay dozens, if not hundreds, of separate fees at mortgage closing, it is unsurprising that some of them are junk fees.
The CFPB has identified the trashiest junk fees commonly found at mortgage closings as buydown fees, credit report fees, home appraisal fees, title insurance fees, and mortgage origination fees. Some of these fees are more expensive than they need to be, while others are entirely unnecessary. It is often possible to negotiate your way out of paying junk fees at mortgage closing, or reducing the amount you pay, simply by speaking up about them. Before you close on a real estate purchase, it is worthwhile to review the anticipated closing costs with a real estate lawyer.
Schedule a Confidential Consultation With a Bronx Real Estate Attorney
A real estate lawyer can help you avoid junk fees and other unnecessary expenses associated with real estate purchases. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
cbsnews.com/news/mortgage-junk-fees-cbs-news-explains/