Lender fees are fees charged by banks and other financial institutions for processing and funding a loan. They can include application fees, attorney fees, recording fees, underwriting fees and more.
Lender fees are items payable in connection with a loan and contribute to the total amount of the borrower’s costs. These are the fees that lenders charge to process, approve and fund a loan. For complicated lending transactions like mortgages, the list of these fees may be extensive.
Federal law required lenders in all categories of financing to disclose the costs of financing to borrowers before the transaction can move forward.
For example, mortgage lenders are required to provide a Good Faith Estimate (GFE), which lists the costs associated with obtaining a mortgage loan, within three days of the completion of a loan application.
The Truth-in-Lending Act (TILA) requires all lenders to disclose total financing costs for their loans and also the loan’s annual percentage rate, or APR.
The APR incorporates both the interest rate and lender fees into its calculations and expresses this number as an annual rate to make comparing loans with different pricing structures easier for consumers.