Everything is negotiable, right? From the final selling price of that new apartment building to the amount of rent you want to charge. It finally comes down to a written agreement and the parties Real Estate Investingmove forward. Yet when it comes time to talk to your bank about financing, you need to know in advance what is negotiable and what is not.

 

On the Table

What’s open for negotiation? Mostly anything the bank charges for services it renders. Most banks and mortgage companies have a predetermined list of fees they routinely charge on each application. A processing fee, an application fee and underwriting fees are common. Banks and mortgage companies have control over their internal pricing so don’t be afraid to ask for a waiver on each and every charge. You may not get everything you want but you won’t get anything if you don’t ask. Lenders will also collect fees from you upfront to pay for third party services needed such as an appraisal fee and even two appraisal fees when more than one appraisal is required.

Off the Table

Some fees the lender simply doesn’t have any control over. Let’s look at title insurance for example. Because title insurance is in fact an insurance policy, those rates are regulated by the state’s insurance commission. That keeps a lid on the premium but also removes the possibility of a reduction. Attorney fees and settlement charges may also be non-negotiable but in certain areas, these third party providers may be willing to negotiate a lower fee but that is something you must do on your own, your bank will rarely ask for additional discounts.

Finally, lenders do have some leeway as it relates to interest rates. You know, for example, that you can pay discount points upfront to get a lower rate but your lender can also adjust your interest rate slightly higher and then provide you with a lender credit toward those closing fees the bank has no control over. Just remember, don’t take it for granted all the charges are set in stone…they’re not.