Can I Avoid Lender Fees
Basics
Mortgage lenders usually have a few basic fees that don't change much from lender to lender.
These charges may include:
- underwriting fees
- document preparation fees
- wire fees
An underwriting fee is the cost of the lender to review and approve the loan. It is the cost of maintaining a trained lending staff to professionally analyze and decide which loans to approve. A mortgage lender's underwriter may evaluate an applicant's income documentation, employment documentation, asset documentation, tax returns, bank statements, rental verification, licenses, real estate purchase agreements, credit reports, explanation letters, and other documents.
All of this takes time and the skill of a professional. Often times the underwriter will request additional documentation to make sure the guaranteed payday loans bad credit should be approved. The cost of this staff is passed on to the borrower in the form of an underwriter fee.
Document preparation fees are the cost of generating the large number of documents that you will need to sign. This is usually a small fee.
Wire fees are the cost to the lender for wiring their money to fund your loan. They pass this charge on to you.
Avoiding Closing Cost Fees
You can avoid paying closing costs upfront by including them as part of your loan. One way or another you will end up paying closing costs.
You can compare closing costs between different mortgage lenders. These costs can be very different for the exact same loan and terms. Some offers will be reasonable, while others may try to charge you a lot.
Make sure you have enough time to reject a bad loan offer. It usually takes around 30 days to get a new loan from a different lender, but can be done in less time if all your supporting loan documents are already organized.
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