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What steps can you take to reduce the processing cost of your application for real estate finance? Well, the processing cost is charged to cover the expenses that the finance provider incurs until approval of the application and finalization of the loan amount. The finance provider, rarely if ever, lends money out of his or her pocket. Rather, they act as a bridge between financial institutions offering loans and borrower desirous of purchasing the house.
The processing fee is often charged as a percentage of the total value of the loan. This is very unfair because cost of processing a loan is never directly proportional to the value.
Of course, the cost of processing a $100,000 loan will be very less as compared to the cost of processing a $100,000,000 loan. However, the cost is not very high when the cost of loan amount rises or falls by a few hundred thousand dollars. Convincing the finance provider to go in for a fixed fee as processing charges will be very difficult.
You should try and reduce the percentage of fee charged. The best option to achieve this goal is to keep your options open and deal with multiple finance providers at once. The lender will not have any hesitation in reducing processing fees if you indicate that you may take your business elsewhere. This is why one should use the internet and keep track of other service providers and lenders. Whether you choose the option and execute the threat or not is a different question. The important thing is to keep this option open at all times.