Profile picture for bill7578

Origination Fees!!!

Hi everyone,

Why is my lender charging me Appraisal fee/credit report/tax service fee/flood cert fee/application fee/processing fee/hazard insur perm? total about $2500? can someone please tell me if thats ok or I can do better?

Thank you!
  • December 13 2012 - US
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Answers (4)

Best Answer

Bill,

Most of the fees you mentioned above are valid.  Appraisal and credit reports are things that the lender has to pay for as well.  The important thing on those two items is to make sure that the lender isn't marking up the fee.  There is generally a fairly standard fee for both of them in each market area, and the lender shouldn't charge you more than the actual service fee on either of them.

Flood certification, application fee, processing fee, hazard insurance premiums are all valid as well. 

As a general rule, origination fees shouldn't total more than around 1% of the total loan amount.  If the $2,500 you mentioned is much more than 1% of the total loan amount, then you need to find out why.
  • December 13 2012
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Profile picture for Ofe Polack
Before you engage the services of a lender you should know what the charges are going to be.  You can always compare prices with other mortgage brokers.
  • December 13 2012
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Bill...Based on the fees you have listed only the application/processing fee would fall under the category of an "Origination Fee".  Would need to know more details of the loan/transaction in order to tell you whether you are getting a decent deal or not.
  • December 13 2012
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Profile picture for bill7578
Thanks guys for the reply, based on the house price 1% will be $2100 so he's $400 over!!
  • December 13 2012
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