Lender fees are items payable in connection with the loan and contribute to the total amount of the loan's closing costs. These are the fees that lenders charge to process, approve and make the mortgage loan. See Closing Costs for more information.
Don’t forget that though lenders primary function is to make funds available to borrowers, they are still businesses. One of the ways that lenders make money is through interest rates, closing costs and lender fees.
When you are closing on a loan, be sure to read all of the fine print. If there is a fee you don’t understand, ask the lender before you sign the papers. Lenders will sometimes add extra fees in order to bolster their profits. Get a thorough explanation of any fee that you don’t understand or that seems erroneous. Getting a loan is costly enough, and if you question a fee, your lender might waive it.
Don’t forget that lender fees are just a part of a loan’s closing costs. You will also probably be expected to pay origination fees, charges for pulling your credit report, title search and insurance. You can usually expect closing costs to be around 2 to 6 percent of your total mortgage.
Also remember that your lender is required to give you a Good Faith Estimate, or GFE, of what you can expect to pay at closing. Your Good Faith Estimate will give you ballpark figures of what you will charged, including lender and attorney fees, title search, origination fees and all of the other components of your mortgage.
July 11, 2006
