Taking out a mortgage loan is far from inexpensive. You'll spend thousands of dollars for the services of everyone from real estate attorneys and appraisers to title insurers and loan officers. There's no reason, then, for you to tip anyone at the mortgage closing table. Everyone who's in that room with you is already being compensated for their work.
The Costs of Closing
According to the 2012 survey of closing costs conducted by Bankrate, the average home buyer will pay $3,754 in closing costs when taking out a $200,000 mortgage loan. That figure varies by location and by the size of your mortgage loan. For instance, in New York, where, according to Bankrate, closing costs were highest in 2012, home buyers paid an average of $5,435 to close a $200,000 mortgage loan.
Refinancing a mortgage loan -- canceling your current loan and taking out a new one with a lower interest rate -- isn't cheap, either. The Federal Reserve Board estimates that it costs homeowners from 3 percent to 6 percent of a mortgage loan's outstanding balance to refinance a mortgage. If you owe $180,000 on your mortgage loan, you'd have to pay from $5,400 to $10,800 in closing costs to refinance.
No Tipping Necessary
The reason it is so costly to take out a mortgage loan or refinance an existing one is simple: Many financial professionals are involved in the mortgage-lending process, and each of these professionals gets paid. Your lender or broker might charge you an application fee, a fee that usually costs about $365, according to the Federal Reserve Board. Your lender might also charge you a loan origination fee that, according to the board, can range from $2,130 to $3,105. Title insurers will charge you for title insurance on your property, a fee that can cost $100 in one state to $900 in another, according to the Federal Reserve Board. Attorneys, home inspectors and appraisers might charge you, too. All of these professionals receive payment for their services. They don't need tip money from you.
Not only do you not have to tip anyone at your mortgage closing, you should be a savvy shopper, too. You can take out a mortgage loan or refinance an existing loan with any lender licensed to do business in your state. Before applying for a mortgage loan with any of these lenders, call several to inquire about their fees. Different lenders charge different fees, and you can save a substantial amount of money by comparison shopping. And when you're done with your closing? Take yourself out for a celebratory dinner. Then you can tip someone: your waiter or waitress.
Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.