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Old 06-27-2015, 09:18 AM
 
Location: High Bridge, NJ
3,858 posts, read 8,053,871 times
Reputation: 3317

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Just received this breakdown from a prospective lender:

Application fee: $1020
Appraisal: $495
Lenders coverage: $25
Title services: $731
Title endorsement: $75
Attorney fee: $950
Owners coverage: $1014
Recording fee: $350
Survey: $450

The fees highlighted are the ones that I don't understand or question:
  • Application fee - How does this compare to other lenders?
  • Appraisal - My neighbor is a professional appraiser and usually gets about $250 for an appraisal.
  • Owners coverage - What is this?
  • Recording fee - I assume this is paid to the county? Seems like a lot but I guess it's how they make their money?

Loan amount will be about $220,000 - Should I keep shopping around?
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Old 06-27-2015, 10:33 AM
 
3,318 posts, read 7,255,247 times
Reputation: 4095
Quote:
Originally Posted by Badfish740 View Post
Just received this breakdown from a prospective lender:

Application fee: $1020
Appraisal: $495
Lenders coverage: $25
Title services: $731
Title endorsement: $75
Attorney fee: $950
Owners coverage: $1014
Recording fee: $350
Survey: $450

The fees highlighted are the ones that I don't understand or question:
  • Application fee - How does this compare to other lenders?
  • Appraisal - My neighbor is a professional appraiser and usually gets about $250 for an appraisal.
  • Owners coverage - What is this?
  • Recording fee - I assume this is paid to the county? Seems like a lot but I guess it's how they make their money?

Loan amount will be about $220,000 - Should I keep shopping around?
Application Fee? Cease all contact with that lender. I haven't seen an Application fee in forever. Appraisals are anywhere from $450 to $600+ these days. Owner's Coverage is Title Insurance. Recording fee looks high, but is a third party fee and cannot be "padded."

But seriously, the Application Fee is telling, and is a very large, quite red flag.
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Old 06-27-2015, 10:40 AM
 
Location: High Bridge, NJ
3,858 posts, read 8,053,871 times
Reputation: 3317
Quote:
Originally Posted by Pfhtex View Post
Application Fee? Cease all contact with that lender. I haven't seen an Application fee in forever...But seriously, the Application Fee is telling, and is a very large, quite red flag.
This seems to be the only fee that goes directly to the lender though-there is no "Origination fee" listed anywhere, so I assumed that this was how the broker, lender, etc...gets paid. I just wanted to know how it compared to other lender fees. Obviously I'm going to have to pay something to the lender for originating the loan.
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Old 06-27-2015, 10:43 AM
 
3,318 posts, read 7,255,247 times
Reputation: 4095
Yeah, but calling it an Application Fee is...bush league? Typical lender fees include Underwriting, Processing, Credit Report, Flood Cert, maybe a Doc Prep but probably not. Then Origination/Discount can at least be tied to rate.

Are they asking for the Application Fee up front?
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Old 06-27-2015, 11:37 AM
 
Location: High Bridge, NJ
3,858 posts, read 8,053,871 times
Reputation: 3317
Quote:
Originally Posted by Pfhtex View Post
Are they asking for the Application Fee up front?
No, it's just part of the closing costs. I've already applied and been pre-approved. I do know well enough that any lender asking for an up front fee just to apply is definitely unscrupulous.

Quote:
Originally Posted by Pfhtex View Post
Yeah, but calling it an Application Fee is...bush league? Typical lender fees include Underwriting, Processing, Credit Report, Flood Cert, maybe a Doc Prep but probably not. Then Origination/Discount can at least be tied to rate.
So it sounds like they're just not being very transparent by charging and blanket fee and not really breaking out the costs. I am going to check with one other broker I had been in contact with just to see how they stack up.
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Old 06-27-2015, 01:41 PM
 
Location: Phoenix, AZ area
2,932 posts, read 2,394,014 times
Reputation: 3357
The lender doesn't determine the appraisal cost, it is all screwed up now they have to send if to a 3rf party who sends it to an appraiser which is why there is a difference. Other than their app fee being used as their origination fee the total costs for a 220k loan are pretty low. Most people don't get surveys done either so that's an interesting one.

As for the owners and lenders coverage they are title insurance, on the low side, and you can't escape them.
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Old 06-27-2015, 01:51 PM
 
Location: High Bridge, NJ
3,858 posts, read 8,053,871 times
Reputation: 3317
Quote:
Originally Posted by AZ Manager View Post
The lender doesn't determine the appraisal cost, it is all screwed up now they have to send if to a 3rf party who sends it to an appraiser which is why there is a difference. Other than their app fee being used as their origination fee the total costs for a 220k loan are pretty low. Most people don't get surveys done either so that's an interesting one.

As for the owners and lenders coverage they are title insurance, on the low side, and you can't escape them.
Thanks, I appreciate your input. As for the survey, it's the law in NJ that when a property changes hands a survey must be done. Guess who lobbied for that one

Last edited by Badfish740; 06-27-2015 at 02:22 PM..
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Old 06-27-2015, 07:39 PM
 
Location: Phoenix, AZ area
2,932 posts, read 2,394,014 times
Reputation: 3357
Quote:
Originally Posted by Badfish740 View Post
Thanks, I appreciate your input. As for the survey, it's the law in NJ that when a property changes hands a survey must be done. Guess who lobbied for that one
Interesting, I did not know that.
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Old 06-28-2015, 05:46 AM
 
Location: High Bridge, NJ
3,858 posts, read 8,053,871 times
Reputation: 3317
Quote:
Originally Posted by AZ Manager View Post
Interesting, I did not know that.
I suppose that one could make the argument that it does serve a purpose in the most densely populated state in the nation-a survey done on my current home when I bought it eight years ago revealed that the fence between mine and my neighbor's property was not mine but his, and it was installed incorrectly (the backside of the fence is facing me), but we are friendly and I have no issue with it. I could see how something like this could cause problems between neighbors though.
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