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We put these in a separate category because they vary so
much from lender to lender and cannot be associated directly
with a cost of the loan. These fees generate income for the
lenders and are used to offset the fixed costs of loan origination.
The Processing Fee above can also be considered to be in
this category, but since it is listed higher on the Good
Faith Estimate Form we did not also include it here. You
will normally find some combination of these fees on your
Good Faith Estimate and the total usually varies between
$400 and $700.
Document Preparation – Before computers made it fairly
easy for lenders to draw their own loan documents, they used
to hire specialized document preparation firms for this function.
This was the fee charged by those companies. Nowadays, lenders
draw their own documents. This fee is charged on almost all
loans and is usually in the neighborhood of $200.
Underwriting Fee – Once again, it is difficult to
determine the exact cost of underwriting a loan since the
underwriter is usually a paid staff member. This fee is usually
in the neighborhood of $300 to $350.
Administration Fee – If an Administration fee is charged,
you will probably find there is no Underwriting Fee. This
is not always the case.
Appraisal Review Fee – Even though you will probably
not see this fee on your Good Faith Estimate, it is charged
occasionally. Some lenders routinely review appraisals as
a quality control procedure, especially on higher valued
properties. The fee can vary from $75 to $150.
Wire Transfer Fee - in the "olden days" lenders
usually funded their loans with a check. Because of
changes made in state laws to benefit banks and savings & loans,
mortgage bankers mostly switched to funding by wire, which
provided an excellent opportunity to add a new fee to the
list of closing costs.
Warehousing Fee - This is rarely charged and begins to border
on the ridiculous. However, some lenders have a warehouse
line of credit and add this as a charge to the borrower.
copyright 2000 by Terry Light and
RealEstate ABC
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