Table of Contents
- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Mortgage Lender Fees
When you are refinancing or buying a new home you would come across many fees like; lender fees, Title Fees, pre-paid, and clerk of court.
There is a lot that goes into this and there is a lot of confusion. In this post, we will understand what lender fees, in detail are.
What Are Lender Fees?
Lender fees are part of closing costs. Lender fees are not all closing costs. A lot of people get really confused where they misunderstand the lender fees for the entire closing costs with pre-paid.
The amount of the lender fee may depend on the lender to lender. But is a small portion of the closing costs.
There Are Few Other Things That Are Not The Mortgage Lender Fees For
Escrow Setup:
This is where we are collecting enough money and putting it in an escrow account so that every single month when you pay into your mortgage, whenever that tax bills or insurance bills are due it would be paid from this escrow account.
The lender might ask to pay this amount pre-paid depending on which month of the year you are refinancing or getting a new mortgage.
Being said that, this is not a lender fee.
Recording Fee:
This fee is being charged to you as the borrower, whether you are a buyer or refinancing your current mortgage to record your new mortgage.
So that it is documented stating that the mortgage is under your name. This is again not part of the lender fee.
Title Fees:
Title fees are charged by the title company for things like docs prep, closing protection letter, storage fee, notary fee, etc. These all fees are charged by the title company to do their portion of this transaction.
Title Insurance:
The lenders may require you to purchase a lender’s title insurance, which protects the amount they lend. You may also want to buy owner’s title insurance, which is meant to help protect your financial investment in the home.
Appraisal Fees:
Of course, it is required by the lender but this is again not a lender fee. The appraisal company gets paid to do the appraisal of the property.
Fees Which are considered as Lender Fees for a mortgage
Origination Fee: This is a fee charged by the lender to originate the loan for the borrower. This is addressed by the loan officer at the start of the loan application process.
Underwriting Fee: The underwriting fees are charged by the lender to underwrite your loan according to the government guidelines.
Make sure all the documents that you have provided are sufficient to meet all the guidelines of the loan.
Processing Fee: Processing fees are usually charged by the mortgage loan officer to process your entire loan file starting from the initial loan application till the closing.
Conclusion
There could be many fees and costs that you would be able to see on a loan estimate.
However, it is important that you compare the right fees before you finalize your deal. The charges of the mortgage lender fees could be different for different lenders.
When you are comparing it is suggested that you compare the right fee to make an informed decision for your mortgage needs.
