How to Negotiate a Commitment Fee From a Lender

Buying a home is expensive -- the biggest purchase many people will ever make. In addition to the purchase price, you'll have to pay closing costs. This money goes to the lender, title company and Clerk and Recorder, among others, and can add up quickly. One cost on the good faith estimate that the lender gives you will be a commitment fee. The commitment fee goes to the lender and can be negotiated.

Instructions

1. Read the good faith estimate your lender gives you after you apply for a loan. This will estimate the fees you'll need to pay and the amount of each. According to Rose Realty, the higher the commitment fee, the fewer other fees should be paid to the lender.

2. Ask the lender what's covered by the commitment fee. If she can't immediately tell you, that's a sign that the fee may be added simply because the lender can get away with it.

3. Request that the fee be lowered if it only covers a few things or eliminated if the lender can't tell you what it covers.

Tips & Warnings

• Educate yourself regarding usual and customary closing costs for your area so you don't overpay.

References

• Rose Realty: How to Negotiate Lower Closing Costs