Question 1

What are lender costs?

Accepted Answer

Lender costs include origination fees (typically 0.5-1% of the loan), appraisal fees ($400-$600), credit report fees, underwriting fees, and other processing charges. These are separate from your down payment and are due at closing. Ask each lender for a Loan Estimate within 3 days of applying so you can compare costs side by side.

Question 2

Can I negotiate closing costs?

Accepted Answer

Yes. You can negotiate lender fees, ask the seller to contribute toward closing costs (common in buyer's markets), and shop title/escrow companies for better rates. In Arizona, buyers typically pay 2-3% of the purchase price in closing costs. Getting multiple Loan Estimates is the best way to negotiate — lenders will often match or beat competitors.

Question 3

What's the difference between origination fee and discount points?

Accepted Answer

An origination fee is what the lender charges to process your loan — typically 0.5-1% of the loan amount. Discount points are optional upfront payments to lower your interest rate — each point costs 1% of the loan and typically reduces your rate by 0.25%. Points make sense if you plan to stay in the home long enough to recoup the upfront cost through lower monthly payments.

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