As the mortgage closing rates are fluctuating, it is becoming fairly evident that, there is an increased necessity to spend some time in deciding on the right loan. A recent market research conducted by Bankrate disclosed that, the average amount payable by a borrower towards loan settlement has decreased. Between the years 2015 to 2016, the apparent charges imposed while closing a home loan has dropped marginally over seven percent. Going forward, lenders have the potential to play a crucial role in extending a helping hand towards borrowers, so that they can find the perfect fit for themselves.
How the Costs Add Up for Lenders
From the lender’s perspective, cost estimates for loan processing include the original fees and variable costs like inspection charges, property appraisal, homeowner’s insurance, title insurance and taxes, discount points as well as other prepaid components. With the inclusion of all these components, the ultimate fee levied on the day of loan closure is bound to be higher than that estimated in the study. The average amount projected by the research was $1,847 and based on differences in geographical location, the variables could mount up to a maximum of $3,000. Another interesting information that surfaced after the conclusion of the survey was that, the mean third-party charges had surged by almost 22%, although indigenous fees had come down by a similar figure. While there is no official clarification on the underlying causes of this phenomenon, experts are suspecting that- the drop in mortgage closing rates have resulted in the dip in origination fees and third-party charges have gone up due to inflation and additional expenses incurred in dispensing all these services.
How Lenders Can Help Borrowers
Mortgagees have now started abiding by the new mandates concerning the supply of necessary documents to prospective mortgagors. In the process, four former documents have been broken down into two less demanding forms, which are circulated to borrowers when they file their loan applications.
Regulatory compliance officers have accepted the fact that modern day lenders have come under additional pressure to maintain adherence to the new rules and their expenditures have also increased manifolds. Though these surcharges have yet been passed onto borrowers, people have started speculating that someday or the other, these added costs will show up in their mortgage balance sheets. With better rates around, this is the right time to move ahead with a home loan. Alongside, title insurance fees are also rising and this might further increase burden of a few hundred dollars on the borrowers, for every loan they take. Now, it is time that mortgage lenders come up and help their borrowers to gauge the usefulness of moving forward.
Expert Mortgage Assistance leverages its wide experience in mortgage servicing to help lenders streamline their operations for enhanced cost and time savings. Contact our experts to know how we make mortgage outsourcing faster, easier and better.