So then it doesnt matter what you call it....
I have seen lenders charge 7% 1 origination fee, and 1 discount point.
This was when the rates were in the high 5's, and the borrower had a prime credit score.
Breaking down the fees will help a borrower to negotiate, and to see what are 'junk fees'. Just because you dont charge it doesn't make it 'wrong' or doesn't make it 'fluff'.
I dont charge credit report fees....but those are fees that are 'incurred' in a mortgage transaction. Also, the lender may be including the DU/LP fee.
Bottom line is the bottom line.
To compare a Good Faith Estimate on a purchase the borrower will need to look at the lender fees. Including the 3rd party fees is 'irrevelant' as the attorney represents himself. Some lenders may put low attorney fees, and this may throw off the 'bottomline'.
Some lenders do it this way
Bogus Lender
800 lines/Lender Fees = 4000
3rd party fees = 1000
Total = 5000
True Lender
800 lines/Lender Fees = 3000
3rd party fees = 3000
Total = 6000
You may think that the first figures are correct, but the 2nd one is the more accurate estimate. What will happen is that the 3rd party fees will actually add up to 3000, and the first total will go to 7,000.
Always compare the 800 lines (800-899), and add/compare up these fees.
Call the attorney directly, and ask them to give you all the 3rd party fees.
Once you have the attorney fees, then you can add it to the lender fees, and you'll have a close estimate.
After you have looked at the fees, now you can compare the rates/apr.
BTW be careful with lenders that charge 'discount points'. It is illegal to sell you a higher rate, AND charge a discount point. Discount points are not the same as origination fees. The government views them differently, and I believe also has different tax benefits.
Quote:
Originally Posted by TwiloMike
It's absolutely the bottom line that matters. We charge a standard set of fees whether packages are sent or not. There aren't fees that increase on my HUD to "make up" if I had to mail something.
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