Like any other business, banks, credit unions, or mortgage brokers can survive only if they’re making a profit. And the income of mortgage lending businesses comes from the fees they charge. Most of these fees are legitimate for a necessary service, but sometimes they’re padded, and unnecessary costs are added in. You want to root out and eliminate the padded fees as early in the process as possible. There are lots of small and not so small fees associated with getting a mortgage.
These are the closing costs and other fees the industry calls garbage fees. Sometimes the line between the two becomes blurry, and the only way you can tell is by comparing fees from several lenders. For instance, one lender may charge a 1 percent origination fee ($1,000 on a $100,000 mortgage), a typical fee lenders charge for getting you the loan. Suppose a mortgage broker ups this fee to 1.5 percent or $1,500. This is certainly not illegal or even unethical, but why should you pay more than you have to? By comparing fees, you’ll likely find other lenders charging only 1 percent.
Typically though, the ‘‘good fees,’’ if you don’t include an origination fee, will run from $600 to $975.
These are the closing costs and other fees the industry calls garbage fees. Sometimes the line between the two becomes blurry, and the only way you can tell is by comparing fees from several lenders. For instance, one lender may charge a 1 percent origination fee ($1,000 on a $100,000 mortgage), a typical fee lenders charge for getting you the loan. Suppose a mortgage broker ups this fee to 1.5 percent or $1,500. This is certainly not illegal or even unethical, but why should you pay more than you have to? By comparing fees, you’ll likely find other lenders charging only 1 percent.
Typically though, the ‘‘good fees,’’ if you don’t include an origination fee, will run from $600 to $975.
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