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Can someone give me some insight as to how to ask a lender to remove their "junk fees".
I have a lender who's charging us a commitment fee of $550 an application fee of $350 and an origination fee of 1%. I don't mind paying the origination fee, and possibly the application fee (which covers the appraisal and credit check) but the commitment fee is what I want to see waived.
I guess I am inexperienced and don't know how to go about asking them without saying "remove your junk fees"
Your agent should call the lender for you and get it removed. If you have no agent, call other lenders, get other GFEs and show it to your lender.
Vicki
this may not be possible. committment fees and application fees may have legitimate purposes, the former going to cover the costs of the lender and the latter going to cover the costs of processing. appraisal fees and credit report fees should be listed separately as they are third parties fees.
Can someone give me some insight as to how to ask a lender to remove their "junk fees".
I have a lender who's charging us a commitment fee of $550 an application fee of $350 and an origination fee of 1%. I don't mind paying the origination fee, and possibly the application fee (which covers the appraisal and credit check) but the commitment fee is what I want to see waived.
I guess I am inexperienced and don't know how to go about asking them without saying "remove your junk fees"
Try asking the (mortgage) broker that's working with you to reduce their fees(Origination). Who cares where the cash break to you comes from as long as it comes. If you're using your own bank, that may not work but should give you some leverage on the committment fee then. I'd just ask and complain about the fees, I'm guessing someone will give you a break somewhere. Good luck and let us know what progress you make!
Isn't it the origination fee which is junk? From what i understand, it's the another way of saying points and someone with good-excellent credit shouldn't have to pay down their interest rate.
I believe a broker should get their fee on the spread and there are some legitimate processing fees.
Your agent should call the lender for you and get it removed. If you have no agent, call other lenders, get other GFEs and show it to your lender.
Vicki
this may not be possible. committment fees and application fees may have legitimate purposes, the former going to cover the costs of the lender and the latter going to cover the costs of processing. appraisal fees and credit report fees should be listed separately as they are third parties fees.
My lenders do not charge excess fees. In my opinion, a $500 fee plus a $300 fee plus a 1% origination fee IS excessive. Obviously this buyer feels the same way. Not to mention the yield spread but this lender seems to be overcharging on his fees.
Vicki
Isn't it the origination fee which is junk? From what i understand, it's the another way of saying points and someone with good-excellent credit shouldn't have to pay down their interest rate.
I believe a broker should get their fee on the spread and there are some legitimate processing fees.
An origination fee is a legitimate form of compensation for the originator and the mortgage company. Discount points reduce, or buy down, the interest rate on a loan. If an originator and mortgage company's compensation is soley from yield spread then the interest rate on the loan will be higher so that the lender can pay it.
My lenders do not charge excess fees. In my opinion, a $500 fee plus a $300 fee plus a 1% origination fee IS excessive. Obviously this buyer feels the same way. Not to mention the yield spread but this lender seems to be overcharging on his fees.
Vicki
The $500 fee was identified as a committment fee which covers the costs of the lender for funding the loan. The application fee of $350 covers the costs of processing the file, not the appraisal and the credit report; they are separate line items on the GFE. An origination fee is the compensation for the originator and the mortgage company. And it's impossible to know if yield spread is being charged without knowing the par rate for that program for that day and the rate the borrower was quoted. Some loans have YS, some don't.
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