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What are reasonable fees charged by a broker for a $230,000 refi?

  • December 31 2008 - Dallas
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Answers (10)

beester,

Does it matter to you if it is a junk fee or real?

All that matters is that the lender/broker is asking you to pay it.  Get the good faith estimates from the lenders and compare your total costs.  It doesn't matter if the fees they charge are real or not.  If you are paying them they are real to you!  Don't waste your time trying to figure out what's junk and what's not.

This is the catch if you are not dealing with an honest loan officer what they disclose on the good faith and what appears on the HUD-1 at closing will likely be different and not in your favor. 

Find a lender that you are comfortable with, don't shop for the lowest rate and fees inevitable you end up getting what you pay for.

No magic lenders, no magic loans, no magic pricing
  • December 31 2008
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I agree- 1.5% is a good amount. There are still MANY brokers out there who try to get 3%, and what that means to consumers is that they are paying a much higher rate (as much as .5% higher), or paying higher fees. Calling points 'origination fees' seems to be a very common avenue for some to pad their profits.
  • December 31 2008
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Profile picture for Sir Allan
Andrew is describing a form of 'ysp' the broker gets from the lender.

I am with him that 1 to 2 % is reasonable, depending on how large the mortgage is. In your case, 1.5% is reasonable.

This can be charged as 'points' or as srp for a slightly higher interest rate.

The rest of the fees are standard 'closing costs' that dont vary much within one state.

Ask for a Good Faith Estimate from your lender and you should be able to get a good idea then.
  • December 31 2008
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Profile picture for beester96
Part of the reason it is complicated is because a lot of brokers/lenders are not upfront with their fees. I know brokers/lenders do not work for free and if they give you a better rate then they will usually make it up somewhere else so it makes it difficult to determine the bottom line.  AIso, I consider myself an educated consumer as I try to gather as much information as I can to put myself in the best position not to be taken advantage of but I still find difficulty in discerning what fees are "junk" and which are legitimate.
  • December 31 2008
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SRP is what the broker get's paid by the lender for delivering the loan to that lender.  Junk fees in my opinion are any fee that does not go to a 3rd party. 

For example FHA allows the lender to charge a commitment fee. in my opinion that is a junk fee because it is just an additional fee that the bank is allowed to charge that adds to profit and is not paid to anyone.  The difference between a lender and a broker is a lender like myself can charge an Underwriting fee that is just an additional fee.  However if I was to broker that loan the actual lender may charge the broker an underwriting fee.  You could arge the 1st is a junk fee and the 2nd is not.

If you want to compare your options get good faith estimates from the lenders you are looking at and figure out how much cash you will need or what the costs are to refinance with each lender.  What they call the fees and how they get compensated is irrelevant.  What matters is how much is it costing you and what is the rate and term sof the loan.  Consumers make the shopping process more complicated than it needs to be.
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Profile picture for beester96
What is SRP? What do you consider junk fees?
  • December 31 2008
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Broker Compensation.  Closing costs will vary depending on the state as well as the county and city your property is in.  That is much tougher to answer. 

I don't know too much about Texas but if you get a couple of quotes the closing costs between lenders should not vary by a whole lot.  If they do ask why.  Recording, title, appraisal and all the standard fees should be the same between lenders.

  • December 31 2008
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Broker Compensation.  Closing costs will vary depending on the state as well as the county and city your property is in.  That is much tougher to answer. 

I don't know too much about Texas but if you get a couple of quotes the closing costs between lenders should not vary by a whole lot.  If they do ask why.  Recording, title, appraisal and all the standard fees should be the same between lenders.

  • December 31 2008
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Profile picture for hpu73
Is that total closing costs or only broker compensation?
  • December 31 2008
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Between SRP and junk Fees I would say between 1.5% and 2% would be fair.
  • December 31 2008
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