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Mortgage Associated Fees - A Know-How

Posted on: 06th Apr, 2004 11:41 pm
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.
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
Posted on: 28th Jul, 2006 04:30 pm
Hi, I certainly agree with you. Your advice is really very helpful for us.
Thanks a lot!
Posted on: 25th Jul, 2008 07:53 am
Our fees are
Points ( if you choose to buy down a rate)
Credit Report
Flood Certification
Appraisal
Tax Service
Underwriting

Then you have escrows for taxes and insurance
Per diem interest.
Courier charges if any

Then your chosed title company has fees.

The best thing to do is ask for a good faith estimate. If a fee looks shady, ask about it.
Beware of yeild spread premiums, this means you are dealing with a broker, not a direct lender. That means they shop for rates with lenders to find you a deal. Often times you end up with something totally different in the end.

Always get it in writing.
Posted on: 01st Oct, 2008 12:27 pm
thanks for the information
Posted on: 24th Jul, 2009 06:14 am
i heard, if we are home buyer, seller agent will cover all of above mentioned fee for us??
Posted on: 27th Jul, 2009 07:53 pm
It may vary from agent to agent Mail...However, as a buyer, you can always negotiate with the seller's agent.
Posted on: 27th Jul, 2009 09:05 pm
mailbox, you "heard" this information where? i disagree with our guest's assessment. you can, on occasion, get closing costs paid for by a home seller, but there's no real estate agent that's going to pay any of your closing costs.
Posted on: 28th Jul, 2009 08:47 am
Lot more depend on the need of the hour.An agent may lower some fees but at any point of time he will not pay your part fully to the seller.If he does so he will be out of business within few months.
Posted on: 24th Aug, 2009 11:25 am
lowering fees to make a deal work is a seldom-used but occasional thing. it depends on how badly, in some cases, a realtor (or two) wish to have a deal come to fruition.
Posted on: 24th Aug, 2009 12:01 pm
why people lower the fees?? just to make the offer more lucarative.(as it wasn't that much before) and thus people will buy it.

But it should not be so sweetened that it appears that it is vague.Any person whoever uses common sense will tell you about the difference between good deal and sweetened deal.
so take the charge wisely.
Posted on: 31st Aug, 2009 09:54 pm
I have a mort. and a HEL ....thing are tight hard trying to keep up don't want to lose my home tried two loan co. to get one 30 year loan all i got was app.fee for 500.00 and another for 375.00 and sorry home not worth 100000
only app. for 66000 and a month later now its 97000 but no loan anyone know of any help for me.
Posted on: 22nd Oct, 2009 05:42 pm
Hi Mike,

As there's no equity in the property, it would be difficult for you to get a loan. If you want to save the property from going into foreclosure, then you should apply for a loan modification. If there are two lenders, then you will have to individually apply for modification with them. If they agree to it, then your interest rate for paying the mortgage dues would be reduced making it affordable to pay off the loan.
Posted on: 22nd Oct, 2009 10:42 pm
Lot more depend on the need of the hour.An agent may lower some fees but at any point of time he will not pay your part fully to the seller.If he does so he will be out of business within few months.
Posted on: 31st Oct, 2009 09:44 am
what is that all about, wsumeet? an agent will lower fees but "not pay your part fully" to the seller????? what are suggesting? is there that much fraud that you see?
Posted on: 31st Oct, 2009 04:40 pm
I think wsumeet is refering to an agent being able to negotiate lower fees on their clients behalf? They don't pay the difference themself, they just negotiaste lower charges.

Much more common in more mortgage friendly environemnts, but probably still happens now to some degree for good clients.
Posted on: 21st Apr, 2010 08:45 pm
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