Closing costs for buying a home have risen along with rates
Real estate agents and lenders typically suggest loan settlement providers and insurance agents they are familiar with, but borrowers do not have to follow their recommendations and can shop around, Ms. Cornelissen said.
Steve Gottheim, general counsel at the American Land Title Association, which represents the insurance industry, said the cost of insurance has fallen about 8 percent nationally over the past two decades. Most of the cost of title insurance is paid for county deed searches, he said.
The consumer bureau’s post also said that higher credit report fees, for which mortgage lenders have recently reported steep rate increases, “warrant further investigation.” Home buyers have no control over these fees, which credit bureaus charge lenders.
Here are some questions and answers about loan origination costs:
What is the best way to keep the costs of buying a house under control?
The most effective thing homebuyers can do is seek mortgage quotes from multiple lenders, said the consumer bureau’s Ms. Thompson. “Most people don’t,” she said. But research shows that if they do, they can get lower rates, saving up to several thousand dollars over the life of their loan.
How do I know if it’s worth paying for discount points?
Calculate the break-even point for your loan. On a $300,000 fixed interest mortgage 6.5 percent over 30 years, your monthly payment for principal and interest would be about $1,896. If you purchased one discount point for $3,000 and lowered your rate to 6.25 percent, you would pay about $1,847, saving $49 per month. If you divide $3,000 by $49, that means you’ll have to own the house for about five years before you can sell it or refinance to pay off the extra costs. (Financial sites like Nerdwallet offer calculators.)
Are discount points tax deductible?
Costs for discount points are generally deductible according to TurboTax. However, you must itemize the deductions on your return instead of taking the standard deduction.