Closing Costs When Buying or Refinancing a Home
Other Lender Fees
We put these in a separate category because they vary so much from lender to lender and cannot be associated directly with a cost of the loan. These fees generate income for the lenders and are used to offset the fixed costs of loan origination. The Processing Fee above can also be considered to be in this category, but since it is listed higher on the Good Faith Estimate Form we did not also include it here. You will normally find some combination of these fees on your Good Faith Estimate and the total usually varies between $400 and $700.
- Document Preparation
- Before computers made it fairly easy for lenders to draw their own loan documents, they used to hire specialized document preparation firms for this function. This was the fee charged by those companies. Nowadays, lenders draw their own documents. This fee is charged on almost all loans and is usually in the neighborhood of $200.
- Underwriting Fee
- Once again, it is difficult to determine the exact cost of underwriting a loan since the underwriter is usually a paid staff member. This fee is usually in the neighborhood of $300 to $350.
- Administration Fee
- If an Administration fee is charged, you will probably find there is no Underwriting Fee. This is not always the case.
- Appraisal Review Fee
- Even though you will probably not see this fee on your Good Faith Estimate, it is charged occasionally. Some lenders routinely review appraisals as a quality control procedure, especially on higher valued properties. The fee can vary from $75 to $150.
- Wire Transfer Fee
- In the "olden days" lenders usually funded their loans with a check. Because of changes made in state laws to benefit banks and savings & loans, mortgage bankers mostly switched to funding by wire, which provided an excellent opportunity to add a new fee to the list of closing costs.
- Warehousing Fee
- This is rarely charged and begins to border on the ridiculous. However, some lenders have a warehouse line of credit and add this as a charge to the borrower.
copyright 2000 by Terry Light and RealEstate ABC, modified 2002