Loan Fees

It may seem like someone is always asking you for more money. Listed below are several different types of fees you may be asked to pay. Fees can be different from area to area and from lender to lender. Before you agree to work with any lender, you should get a written estimate, called a good faith estimate, of all of the expenses they will charge. Ask if any of the fees are refundable if you do not qualify for the loan. Also ask if they can be paid at closing rather than in advance. Usually fees for the application, credit report, and appraisal are paid in advance and are not refundable. If you think the fees are too much, check with another lender to see if they charge the same amount.

A LOAN APPLICATION FEE is usually $50 to $100. This fee is charged for taking your application. Sometimes, this fee is higher and includes the cost of the credit report and appraisal (usually between $250 and $500).

A CREDIT REPORT FEE, usually $50 to $80, covers the cost of a Mortgage Residential Credit Report. This is a report from all three credit reporting bureaus. The lender uses it to help decide whether to approve your loan.

AN APPRAISAL FEE is usually between $200 and $600. It pays for an appraisal report made by an appraiser.

A LOAN ORIGINATION FEE covers the lender's costs to prepare and review your loan. It is also called a ''point'' and is usually a percentage of the loan amount. A typical origination fee is about one percent. Not all lenders charge an origination fee. Some lenders charge an origination fee instead of separate fees for loan application, processing, and underwriting. Per Consumer Financial Protection Bureau regulations, some lenders, such as HFA'sl, will allow customary lender origination fees up to 3% of the total first mortgage loan amount or $3,000, whichever is greater.

A PROCESSING FEE, usually $100 to $200, covers the cost of processing the loan and putting together your loan package. This includes checking your rent, employment, and bank account balances.

AN UNDERWRITING FEE, usually about $100, is charged to review and approve or deny the loan.

A DOCUMENT PREPARATION FEE, usually about $100, is charged to prepare all of the documents needed for closing.

A BROKER FEE, can range from a few hundred dollars to one percent of the loan amount. This is the charge paid to a mortgage broker, if you use one, for his or her service.