Mortgage interest rates drop but illegal mortgage fees could negate savings

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Mortgage interest rates drop but illegal mortgage fees could negate savings

The steep drop in interest rates has caused a shopping frenzy in many western countries with buyers looking for a good deal. The rise in applications has not been in proportion to the number of sales but the figures are still encouraging.

If your credit score is in good shape and you have some savings for a down payment and some more for three to six months mortgage payments you could do very well with either a refinance of your current mortgage or with a new mortgage. Even the high end jumbo mortgages have opened up as the interest rates for large mortgages starts to drop also.

However illegal mortgage fees could nullify the savings you make on your mortgage refinance, loan modification or new mortgage.

How can you identify illegal mortgage fees and what can you do about it?
Illegal mortgages how to find them and avoid them.

It would be hard to list all the possible ways of charging illegal fees from borrowers. Three principles might be more useful: Lenders deserve to be paid for their work and services. They should not charge for services they did not perform and they should not receive illegal kickbacks.
For lowly borrowers like us finding out about illegal kickbacks is pretty much impossible unless we invest counterproductive amounts of money investigating lenders what is more feasible is to check for lenders that mark up on service other companies or individuals provide. For instance if your bank requires a valuation of your property by a qualified surveyor and the company charges the bank $300 the bank is not allowed to charge a handling fee or markup in any other way fees for work they have not carried out.

As I mentioned above it is difficult to provide a comprehensive list of fees you must beware of but this will give you an idea. Banks cannot put mark-ups or get kickbacks for that matter on:
-   Appraisals
-   Settlement fees. That is settlement fees charged by other banks or institutions. Banks will charge settlement fees when you pay loan early as well as other circumstances unless you have negotiated some other arrangement.
-   Credit reports.
-   Flood certifications.
-   Pest inspections.
-   Title insurance and title searches.

This is important to understand because most of us would expect that banks are allowed to charge a handling fee for services they arrange but they aren’t, although that hasn’t stopped many lenders to try and get away with it.
There is an opportunity to find a good mortgage deal or to refinance your mortgage, do your homework find the right mortgage for you, but whatever you do make sure you don’t lose all your savings on illegal mortgage fees.