Prices and Promises
- I will get your loan approved for an agreed upon flat-fee, ranging from – $1,000.00 – 3,500.00.
- A copy of the rate lock sheet and the rates will be available to the borrower.
- The total fee will be charged as an origination fee. Yield Spread Premiums paid by wholesale lenders will be credited towards the borrowers closing costs, pre-paid items, and/or loan principal balance.
- Third-party closing costs shall be billed without any mark-ups. Bills are available upon request.
- I guarantee the closing costs disclosed on the Good Faith Estimate. This guarantee does not include pre-paid items associated with property taxes, hazard insurance, or any local transfer taxes. It also does not include items associated with Home Owner Associations or fees (including commissions) charged by Real Estate Agents. If the loan program changes prior to closing represented by a new lock a new guaranteed Good Faith Estimate will be provided.
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| 20% down-payment with middle credit score over 800 on primary borrower. |
$2,000 |
| 20% down-payment with middle credit score over 740 on primary borrower. |
$2,250 |
| 20% down-payment with middle credit score over 680 on primary borrower
. |
$2,500 |
| 20% down-payment with middle credit score over 620 on primary borrower. |
$3,000 |
| 20% down-payment with middle credit score below 620 on primary borrower. |
$5,000 |
| Combination Second Loans or Loans with Mortgage Insurances. |
As above plus $500.00 |
| JUMBO’s – Single loans over $417,000. Equivalent to a maximum conforming first, plus a second. |
As above plus $500.00 |
| Investment properties. |
As above plus $500.00 |
| Sub-Prime Loans – Credit score below 600, state-income, high ratios. |
TBD |
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Fee Description and Provider Information
|
Average Fee
|
| Credit Report – paid to credit reporting company, typically, Advantage Credit Inc. |
$18.00 (individual)
$ 32.00 (joint) |
| Appraisal Fee – paid to Appraiser |
$350.00 |
| Aggregated Investor Fee – The investor’s we broker loans to have their own set of fees. These’s fees often are broken into smaller fees in the hopes that no one will mind. Since it’s all the same to the consumer, we like to disclose these as Aggregated Investor Fees on our estimates. They carry names such as: underwriting fee, tax service fee, 1098 fee, administrative fee, table-funding fee, etc. We call them junk fees. |
$705.00 |
| Flood Certificate – Paid to First American Flood Data. To prove the property is not in a flood zone. |
$16.00 |
| Title Closing Fee (Refinance only – see below for purchases) paid to title insuror. |
$225.00 |
| Title Insurance Premium (Refinance only – see below for purchases) paid to title insuror |
$475 – 825 |
| Recording Fee – Paid to the County Clerk & Recorder |
$121.00 |
Note:
The above comprises the fee’s that we, or any broker, has control over by virtue of our having control over selecting the service providers. On a purchase the title company is selected by the listing agent, which means for the mortgage shopper comparing fees these constitute a distraction that provides plausible deniability for unscrupulous lenders.
| Title Company Junk Fees – Paid to Title Company comprising but not limited to: closing fee’s, courier fee’s, printing fee’s, e-mail fee’s, tax certificate, notary fee, etc. |
$500.00 |
| Title Insurance – Lenders coverage paid to title provider |
$140.00 |
| Title Endorsements (consider asking for bulk pricing) |
$95.00 – $350.00 |
| >State Tax Stamp |
10¢ per $1000 of purchase price. |
More Notes:
The fees do not include Pre-paid fees, which include short-interest, tax and insurance reserves, and the hazard insurance premium. These fees should be the same no matter who provides financing. A lot of fudging is done on these fees in order to win business, since they’re absolutely beyond a lenders control they provide a ready made excuse for why the costs changed.
What’s a junk fee?A junk fee is in the eye of the beholder. In
the broadest sense they’re all junk, but I disagree. The appraisal fee for
instance isn’t junk, a service is performed, and the provider
deserves payment. On the other-hand, an Electronic Document Fee is absolutely garbage, because e-mail saves time, courier costs, and a ream of
paper isn’t used and doesn’t cost $30.00 in any case.
Why not just charge a fee for the loan, and the lender/broker can be responsible for paying all the fees? If we were to do that it would be convenient, but it would also lead to routine overcharging of borrowers. For example, an appraisal ranges from $175.00 to 350.00 If quoted amount assumes a $350.00 appraisal, and the $175.00 appraisal is obtained, what are the odds that the $275.00 difference is passed on to the borrower?
I have developed my own definition for junk fees, for what it’s worth. In my opinion, individual service providers should charge one fee each. Title companies should charge a title fee. Brokers/Lenders should charge an origination fee. The junk is introduced when multiple fees are charged by each provider in an effort to obfuscate that it’s all revenue.
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