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Fees Listed On Good Faith Estimate
Mortgage Applicants should understand each fee on a Good Faith Estimate and who will be receiving this fee. Borrowers that understand each fee may be able to save money on their closing costs. Listed below is a fee listed on the Good Faith Estimate and its description.
Not all lenders list their fees the same. Make sure to compare more then just the origination fees. Often lenders will increase other fees in order to make up for an origination point.
Escrow, title and lender fees are third-party fees: If the mortgage is a purchase money loan, escrow and title will most likely be chosen by the seller. These fees are somewhat negotiable. If the fees for these services seem high, your loan consultant may be able to negotiate a lesser charge
A couple of the items listed in the Estimated Reserves/Prepaid Costs section represent the funds that will be collected to establish your escrow account for your property tax and homeowners insurance. Your first years homeowners insurance premium is also listed as you will typically need to pay for it prior to closing. The line listing prepaid interest will vary depending on what day of the month you close. Interest will need to be collected from the closing date thru the end of the month.
Loan Origination Fee: This fee is charged by your Mortgage Broker or Loan Officer for preparing your loan application to be submitted to a lender. Preparing your loan application a Broker or Loan Officer must analyze an applicants needs, job history, income, credit history and property information. This information will then be utilized to match borrowers with a Lender and/or loan program.
Appraisal Fee: Most appraisers require this cost to be paid up-front. The fee generally ranges from $300-$600 depending on the value of the property, type of property, etc. This will often be listed on the GFE and the HUD, but will be shown to have already been paid by you. Sometimes, the appraiser will take this payment out of escrow. In addition, some brokers will either refund the cost to you at close of escrow or cover the cost initially and charge you out of escrow.
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