Tag Archives: closing costs

Big banks, credit unions or direct lenders for loans?

Shopping for a loan can be intimidating but so long as you are informed and prepared, you’ll be in a stronger position to leverage all three options into a better rate and/or service. Firstly, reach out to the 3 different types of lenders to get an idea of loan products, emphasizing rate, term and closing costs (origination charges, fees, etc).

Remember that big banks carry the household name and borrowers often pay the premium for that. Issues with larger banks is that while their initial customer service from the loan originator might be good, the subsequent handling of your loan after passing it off to their loan processor or coordinator may be less seamless. We’ve had many clients express their discontent about the bigger banks through the underwriting process. More likely that not, they’ll be selling your loan on the secondary market as soon as possible.

Remember, negotiate everything down: fees, loan origination charges, appraisal, everything.

Now, when deciding between you options remember not to commit to any particular until you’ve done your home work and make them earn YOUR business not the other way around. Ask them what options they have and what they can do for you.

Let us know how much out of your closing costs you were able to negotiate out. We’d love to hear.

How best to utilize your real estate agent’s commission rebate

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The answer is, it depends. Is your market extremely competitive? If so, we’d recommend viewing your real estate commission rebate as a reduction of your out of pocket hard money costs associated with buying a home. Your goal should be to minimize the amount of money you need to pay out of pocket when purchasing a home. Think of it as the opportunity cost of having $5k in hand or borrowing an additional $5k over 30 years. While your long term holding costs and interest on that $5k will translate to much more, it’s more advantageous (at least in our eyes) to have the $5k in hand now so that you can leverage that to increase your offer amount.

Besides, once you’re in escrow, you can negotiate to recoup the increase in the form of a price reduction in exchange for removing contingencies throughout the process.

Thoughts anyone? It depends on the situation, but it a competitive market, usually the most important part of the offer is the price. End of story.

Thoughts? Email us at savings@rebagents.com

*Ask about our 60-40-20 Incentive*

How a commission rebate is applied

Many people have asked us how a commission rebate is applied as they want to make sure it isn’t taxable. Typically the commission rebate from your respective rebating realtor is applied towards your settlement or closing costs. If there is a remaining excess amount, we have it applied towards a reduction in the purchase price.

Some buyers have opted to have the entire commission rebate applied directly towards a reduction in purchase price but it’s a matter of preferences.

Feel free to visit other sites like redfin or rebagents.com to learn more about commission rebates in your area.

Thoughts? Email us at savings@rebagents.com

*Ask about our 60-40-20 Incentive*