Mortgage Associated Fees - A Know-How

Sam

Appraisal Fee
A fee charged by the appraisal to verify the value of the real property that supports the loan amount is known as an appraisal fee. The lender generally passes it to the borrower.

Application Fee
A fee charged by the lender, mortgage broker or mortgage banker to a borrower for accepting a mortgage loan application and estimating initial mortgages processing expenses. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges. Payment of this fee does not guarantee that a loan will be approved. It may or may not be refundable if the lender declines the loan.

Underwriting Fee
It is a fee charged by the lenders to:

Meet the cost of analyzing the risk associated with a loan.
Verify information on the loan application.
Validate the property's worth as collateral and,
Make a final decision on whether or not to grant a loan to the applicant.

Origination Fee
Origination Fee is a fee charged by the lender to cover the administrative costs in processing the loan.
For example, cost to prepare loan documents, check a borrower's credit history, inspect and sometimes appraise a property. It is often expressed as a percentage of the face value of the loan. The fee varies among lenders.

Exam Fee
Exam Fee is a fee charged by a title company for inspecting the public records and title abstracts, to determine the chain of ownership of a property.

Assumption Fee
It is a fee charged by the lender to process the paperwork and update the records when a buyer takes responsibility for a mortgage from the seller. The fee covers the processing and administrative costs for a buyer to assume an existing loan. The charge can be a fixed amount; normally $500, or perhaps a percentage of the outstanding balance, for example, one percent. The assumption fee is paid to the lender at the time of settlement or closing.

Administrative Fee
Administrative Fee is a fee charged by the lender to cover the administrative costs of processing the loan. This fee is generally considered as a lender fee.

Release Fee
Release Fee is a fee charged to release a lien to free real estate from a mortgage.

Taxes and Other Unavoidable Fee
These fees include the State/Local Taxes and Recording Fees and have to be paid regardless of the lender you choose and regardless of that the lender asks you to pay or not.

Samantha · Posted: Fri Jul 28, 2006 4:30 pm Post subject:

Hi all,

I have often seen consumers getting confused with the loan process when they come to know of the different fees gradually.

That is why whenever you approach a lender, never hesitate to ask –

What are included in each fees as several items may be there in one fee.
About any fee that you find difficult to understand or do not understand at all. The lender has to explain you in case you find any problems anywhere.

Hope these small tips will be useful if you remember at the time you shop around for a loan.

Thanks,
Samantha

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