New federal lending rules that went into effect in January will help you reduce closing costs in escrow. These rules require more disclosure and don’t allow “surprise” closing cost increases.
The disclosure might be especially helpful to you. In the old days, brokers got compensated by using a dirty little trick called “yield-spread premium.” This was a way for the broker to get you to pay higher interest, even on top of all the fees, in exchange for a lower interest rate. Now that practice has to be disclosed. In the future, it will likely be banned.
Because of these new rules, and because it’s a buyer’s market, escrow closing costs have dropped.
If you’re a buyer, you should know that you can negotiate most fees.
Of course, you can’t haggle on taxes, but you certainly can fight for better prices when it comes to lending charges, title insurance, appraisal costs and other items. Be especially wary of junk fees. I’m talking about wire transfer fees, loan application processing fees and overnight delivery service fees.
Be alert when it comes to title costs. This is especially true if the home you are buying was sold or financed recently with that same company. If that’s the case, ask for a “re-issuance discount.”
If you’ve got a high enough credit score and a big down payment, you’re a rare breed these days and you deserve to be treated like a king. Get lenders to bid for your business – and closing costs.
80% of the companies that used to be in the escrow business are now out of business. What does that tell you about the survivors? They know they might be next. Use that information to your own advantage.