Closing Costs And Bad Credit

While many of your closing costs are specified by law, government regulation, or third party standard charges, you may find you are required to pay higher closing costs because of your poor credit. The most critical areas you should examine are the following.

• Origination fees
• Loan discount fees
• Broker fees
• Title examination fees
• Legal or escrow costs for closing your mortgage
• Underwriting fees
• Processing fees
• Document preparation or review fees
• Funding fees

These fees can be arbitrary and some lenders will attempt to take advantage of your bad credit situation to increase their income through setting fees that are higher than they those they would charge a borrower closing a market rate mortgage loan. Closely examine your good faith estimate (GFE) and truth in lending (TIL) statement you will receive within 72 hours of making an application. Compare your closing cost line items with other examples you can find using the Internet or your local library. Question any fees that are higher than what is considered “customary”, and do your best to negotiate these costs downward.