How can I be sure my loan fees are reasonable? The most important factor is to work with a Loan officer you trust. There are many fees associated with getting a mortgage however some of these are considered as junk fees. These are fees that are added to the loan just to increase commission. It is important to question any fees you dont feel is reasonable and asked to have them removed.
One of the best ways to insure that your closing costs are correct is to remember that most costs are third party related fees. Appraisal, local taxes, inspections, etc.
To be sure you loan fees are reasonable use a mortgage broker. They have access to numerous lenders wholesale pricing which will get you a low rate and save you money.
If you have quotes from more than one lender who are offering comparable rates you can get a good idea if fees are also comparable by comparing APRs. The best thing to do when comparing quotes would be to discuss the fees and APRs with your mortgage brokers. A mortgage professional will be happy to show you the breakdown of fees, where each of them come from and what each of them are for.
A loan origination fee is the fee that is charged by a mortgage professional for the professional, timely and excellent service they provide to you. Some loans require a lot more time and effort than others and will require a higher mortgage loan origination fee. If you feel uncomfortable about your loan origination fee and think it seems excessive talk it over with your mortgage professional to find out more about the fee.
Many of the fees associated with the loan are standard fees charged by the lender. These can include a fee for a Flood Certificate, Tax Servicing, Wire Transfer, Commitment, Underwriting, and others. When reviewing your Good Faith Estimate (GFE) ask your mortgage professional to explain which fees are for the lender. Other fees are going to be the same regardless of where you go, title fees, lawyer fees, transfer taxes, recording fees, per deim interest, etc.
Some fees, such as property taxes and homeowner's insurance, are prepaid charges. The costs are required regardless of the lender so the loan officer has no control over the amounts. When reviewing your closing costs be sure to exclude the insurance and taxes to get a good picture of how much your loan really costs.
If you feel your fees were too high after closing you can ask your broker to credit that money back to you when your loan funds.
It is always important to keep in mind the old addage, "if it sounds too good to be true, it probably isn't." There are many advertisements about "no fee" mortgage loans but the truth is that all mortgage loans cost money to originate. Many times he fees are hidden in the form of a higher rate, higher margin or longer pre-payment penalties. Working with a trustworthy mortgage professional rather than one that does the most advertising can often clear up the confusion over fees and rates.
When you receive your Good Faith Estimate (GFE), pay particular attention to the 800 series. This is the section that includes your lender and broker fees. Regardless of what lender and / or broker you choose, the other series are not likely to change. For comparison purposes, you should ONLY compare the 800 series.
Keep in mind that a conforming (good credit) mortgage will generally have much lower closing costs when compared to a non conforming (bad credit) mortgage. Always be sure you are comparing similar products when comparing mortgage quotes.