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 Sam
Site Admin
Joined: 21 May 2005
Posts: 281
Location: CALIFORNIA
117.49 Dollars($)
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 Posted: Fri Apr 09, 2004 12:01 am Post subject: Processing Fee |
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Processing fee is a kind of fee required to prepare a mortgage loan application and other loan documents that are reviewed by lenders for approving the loan. It often includes charges required to check the borrower's credit report, which helps to determine his loan repaying ability.
For example, Samuel takes a mortgage loan of $100,000 from Jacob for 5 years at 6% rate of interest. At the time of closing, he pays Jacob, a number of fees including $250 for preparing the application and other relevant documents. This implies that Samuel has paid $250 as the processing fee.
There are charges required for the inspection of the property that is kept as a security for the loan and these are often included in the processing fee. The loan processing fee also includes charges for appraisal of the property, that is, making an estimate of the property value based on which the loan amount is decided. Generally, borrowers pay this kind of fee to lenders at the time of closing when all legal documents related to the mortgage loan are signed.
The processing fee varies from one lender to another and depends to some extent on the credit history of a borrower. An individual having fair credit status and financial position can easily negotiate with the lender to reduce the fee to a certain level. |
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friendly
Guest
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| Posted: Thu Aug 17, 2006 2:37 pm Post subject: mortgage closing fees |
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| Isn't a closing fee of 22000 for a 452000 house extremely high |
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Laine
Guest
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| Posted: Thu Aug 17, 2006 2:55 pm Post subject: |
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Hi,
From what I know the closing costs are normally around 5-6%.
Thanks |
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Quincy
Guest
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| Posted: Thu Aug 17, 2006 3:16 pm Post subject: |
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Hi,
You should ask the lender for the Good Faith Estimate document and check all the details of closing costs that are mentioned. |
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colin
Moderator
Joined: 30 Jun 2006
Posts: 602
Location: Waltham, Massachusetts
112.65 Dollars($)
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| Posted: Thu Aug 17, 2006 3:56 pm Post subject: |
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Hi,
Normally closing cost does vary from one state to another and sometimes there are also lender specific variations.
You can have a look at the closing costs page for more details of the particular expenses added as part of the closing cost.
Thanks |
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Todd Haynes
Guest
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| Posted: Thu Aug 17, 2006 4:29 pm Post subject: |
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I want to add one thing, that at the time of comparing the closing costs, you should look at the amount the company is charging for the processing part. And you should deduct the amounts you are paying in advance, such as the insurance, taxes and similar such other amounts.
Todd Haynes |
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