Hey guys, hope everyone is doing well out there!
I got a Good Faith Estimate from a local mortgage broker, and I wanted to share some of these costs with you folks just to make sure I am being charged fairly. This is on a loan amount of $96,000.00 Here they are:
Appraisal Fee: $275.00
Tax Service Contract: $75.00
Origination Due to Broker: $1200.00
Processing Fee: $395.00
Lender Fee: $550.00
Settlement Fee: $150.00
Title Examination fee: $75.00
Document Preparation Fee: $75.00
Title Insurance Premium: $963.75
Endorsement Fee: $150.00
Recording Fee: $100.00
Flood Cert Fee $20.00
Total Closing Costs Equal: $4028.75 (Buyer Closing Costs)
Prepaid Items and Reserves Deposited with the Lender equal: $2508.00
Junk Fees pad the bottom line…usually, you will have a hard time getting a good definition of “what’s that for?” from the lender. Like, $395 for a “processing fee”…what are they processing? And, $550 for a lender fee – actually it should say “$550 Pure Profit because we don’t think the $100K+ that we’re going to skin you for over the course of your loan is enough” (that won’t fit in the little space on the closing statement.
Basically, any fee to self-fund the lender is a junk fee for extra profit…legit fees are those paid to others like the flood cert and recording fees (watch out, sometimes they pad these, too!)
I would talk with them first…trust me, it’s not the first time they’ve been questioned about fees…
My lender has very few fees and most are the money they pass to others that they have little control over…they might get a small piece of each transaction but largely the money is going to others.
Actually lender fees are just that - “lender fees”.
If you are usisng a mortgage broker then they have to pass the cost for doing business with their lender to you.
Ranges anywhere from $500-$600.
The processing fee seems with in reason for a mortgage broker to charge. A processor is reaspobible for packaging the file, ordering verifications, and working directly with the lender and title to assure a smoothe closing. That position is generally a salaried employee so part of the processing fee goes towards overhead. It also includes other items related to putting the file together.
Doc prep fees are sometime associated with the title company costs. Your doc prep fee is normal as well.
The origination really depends on the amount a broker is making off the interest rate, loan size, and the amount of business you are bringing to the broker. A lower loan amount of $75K or so may have 1.5-2% origination. A loan size of $300K may only have .5%. Repeat business could also have lower origination.
Everything looks in line if your using a broker. Now if you are using a mortgage banker, you would not see a lender fee. However a mortgage banker is not generally signed up with a variety of lenders and may not have access to enough investor products.
JayDee,
Keith gave you a great break down of what should be on there and what should not. However I would call a local title company and ask them what the "mortgage Policy " for the title insurance is. It should be regulated. It looks to me like you are not getting the credit for the refi. And that means that if you paid cash for that mortgage and they have never given you title insurance before then you would pay the higher amount. But if you have had any kind of Mortgage on it then you should be getting a credit for the mortgage policy.
Good Luck and Keith that was a great breakdown.
Tax service fee is the fee charged to verify what your tax rate is and that taxes are paid up and when they are due.
Title insurance, appraisal, title fees, etc, are 3rd party fees and will be the same no matter who you would choose to work with on the lending side of things. Many states have high title insurance fees, for instance, Texas is about 1%.
One thing to keep in mind is that on 3rd party service provider’s fees and also items such as tax service, credit report, appraisal, flood cert, etc, the actual dollar amount of the fee that the broker charges must be charged exactly by law.
Hey Ramona,
Thanks for the helpful input! Actually this iwill be a purchase loan for me, I am not refinancing. So, do these things that you mention above still apply?
Thanks
JayDee
