What Every Borrower Should Receive

JacMac

Successful Homeowner
Nov 21, 2007
219
1
0
New York
I just find this online and I think every borrower should be handed a copy before they even consider applying for a loan with a broker:

Items Payable in Connection with Loan

Loan Origination Fee
Commonly referred to as a "Broker Fee," this is the fee that the Mortgage Provider or Broker charges you in exchange for placing your loan with the wholesale lender.

Mortgage Broker Fee
Same as the Loan Origination fee, you should never pay both.


Loan Discount Fee ("Points")

The percent of the loan amount paid to a lender in exchange for a lower rate. You should typically pay 0 Points upfront unless you are going to keep your loan for a longer time horizon.

Yield Spread premium/rebate **
Money paid to the Mortgage Broker by the lender in exchange for selling you a higher rate than that for which you qualified. For example, if you qualified for 6% but the broker sold you 6.5%, then the lender would pay the broker additional compensation for selling you the higher interest rate. This is above and beyond any other fees the broker is charging you.

** A note of caution about Yield Spread: You should always ask if you are being charged a Yield Spread and definitely get an answer why if you are being charged one.

Be aware, however, that if you choose a "No Closing Cost" option, or are reducing your closing costs with your mortgage, a Broker will charge you a Yield Spread, which will be reflected in a higher Wholesale interest rate and monthly payment. This option means that you would not have to pay the Closing Costs directly associated with your loan upfront at close of escrow.

The Yield Spread would be used to cover the closing costs directly associated with your loan. There are certainly scenarios where this option makes more financial sense than either paying your costs up front or borrowing. Our Break Even Calculator can help you determine if this option makes sense for you.


Appraisal Fee
This fee reimburses the Mortgage Broker or Lender for the amount charged for the appraisal on your property.

Credit Report Fee

This fee reimburses the Mortgage Broker or Lender for the cost of pulling your credit.

Tax Service Fee
This is a fee that applies in states that charge mortgage tax.

Loan Processing Fee
The fee that the Mortgage Provider or Broker charges you to pay his/her processor to handle the paperwork associated with the loan. This is in addition to the Loan Origination Fee.

Underwriting Fee or Lender Inspection Fee
This is what the lender charges to evaluate and make a decision on your loan.

Wire Transfer Fee
The charge for wiring your funds to either your current mortgage company or creditors you are paying.

Title Charges

Closing or Escrow Fee The amount the title company charges you in order to hold your closing documents and close your loan on the lenders’ behalf.

Document Preparation Fee
Depending on the lender, this is a fee the wholesale lender charges to prepare your loan documents.

Notary Fees
The fee the title company charges in order to notarize your loan documents.

Attorney Fees
Legal services provided to the lender such as an examination of the title binder. Occasionally, the seller will agree in the sales contract to pay part of this fee. The cost of your attorney and/or the seller’s attorney may also appear here.

Title Insurance

This is a policy the wholesale lender requires you to purchase from the title company in order to protect their lien position on the title. For example, if you are refinancing your home with a new first mortgage, then the new wholesale lender is assuming they will be the first lien on the title. If, for some reason, this was not the case, this insurance policy covers any loss they may sustain for that reason.

The pricing depends on a number of factors and is tied to your loan amount and is usually a tiered pricing structure.

Title Exam Search
The research done at the county courthouse to verify the legal description of the property, the property taxes, whether they are paid, who holds title and what liens are currently on the property.

Government Recording & Transfer Charges

Recording Fees
The cost of recording your new mortgage at the courthouse.

City/County Tax/ Stamps
Some cities and counties require you to pay a tax on the mortgage you take out. This money does not go to the wholesale lender or broker, but directly to the government agency imposing the tax.

State Tax/Stamps
Some states require you to pay a tax on the mortgage you take out. This money does not go to the wholesale lender or broker, but directly to the government agency imposing the tax.

Additional Settlement Charges

Pest Inspection
An inspection to see if the property is free of infestation.

Flood Certificate
All lenders require that a search be done on the property being financed to determine whether or not it is in a flood zone.

Courier Fee
May be required to reimburse the Mortgage Provider for their cost of transporting documents.

Endorsement Fees
Some wholesale lenders require certain endorsements on the title insurance policy they make you purchase. Of course, these require you to pay additional fees. Some examples would be an EPA endorsement.

Binder Fee
This is a charge for the physical binder that your title insurance policy is kept in.

Items Required by Lender to Be Paid in Advance


Pro-Rated Interest
When you close a loan in the middle of the month, but do not have a payment due until the 1st of the next month, the bank collects in advance the interest due until the end of the current month. For example, if you closed March 15th, your first payment would not be until April 1st. That leaves 15 days in March that the bank would collect interest for at closing.

Private Mortgage Insurance Premium (PMI)
Typically required by lenders if the LTV is greater than 80% of the property’s value. You can usually choose to pay this upfront or as part of your monthly mortgage payments. It usually makes sense to buy out the monthly payments. You will usually be better off getting a 1st mortgage at 80% LTV, and borrowing the rest with a 2nd mortgage.

Hazard Insurance Premium
Insurance to protect you and the lender against loss due to fire, windstorm, and natural hazards. Lenders often require borrowers pay for the first year’s premium at settlement.

VA Funding Fee
Often required by lenders for Veterans and personnel on active military duty.

Reserves Deposited with Lender

Hazard Insurance Premium
All of these items are only applicable if you decide to escrow these assessments and are dependent on what your taxes and insurance are:
Mortgage Insurance Premium Reserve
School Tax
Tax and Assessment Reserves
Flood Insurance Reserves
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,808
458
1,000
48
Southern California
www.loansafe.org
This would be a great list Jac Mac. Wow, you covered every little hidden issue and have left not a stone unturned.

Maybe you should send it to Barney Frank and Charles Schumer????
 

JacMac

Successful Homeowner
Nov 21, 2007
219
1
0
New York
Don't thank me, Moe, I found the list as is, and would link the address, except it's private and I guess I hacked into it :D. Messrs. Frank and Shumer, though, would probably use it to line the the kitty litter -- don't you think?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,808
458
1,000
48
Southern California
www.loansafe.org
Jacmac, you continue to impress me with those skills.
 

JacMac

Successful Homeowner
Nov 21, 2007
219
1
0
New York
Awe shucks :eek:
 

caldwell02

LoanSafe Member
Jan 30, 2010
2,491
18
0
70
Just found this thread and would like an opinion. Here are the fees I paid: Property is in CA. Loans (80/20) dated 1/31/06: Not asking for a free forensic audit here. just opinion...

Prorated County tax 664.15
One day's interest on the first loan 106.64
Document prep fee from Mortgage co: 250.
Tax research Fee - 81.
Flood Search fee: 13.
LBMC underwriting fee: 549.
Proccessing fee - 500.
Broker Application fee: 275.
Broker underwriting fee: 400.
Appraisal fee: 350.
Mortgage broker fee: 3,685.37
Interest on 2nd loan - one day: 32.60
Flood serch fee: 5.
Processing fee - second loan - 299.

Title fees:
Wire fee: 40.
Electronic Doc. Download: 50.
Doc preparation : 45.
Eagle owners policy: 645 could this be PMI?
Escrow fee: 245.50
Special messenger fee: 50.
ALTA extended Loan Policy 1992: 431.
County documentary transfer tax: 170.50
recording services: 150.

Any thoughts/comments?