We are seeing most banks and some lenders collect an upfront loan commitment fee or loan application fee (we call it a “nonrefundable free cash in their pocket” fee). Please do not provide a lender an upfront fee to provide you a mortgage quote. Since banks are not regulated through normal mortgage channels as all other lenders and brokers are, they collect this fee prior to you even signing federally required loan documents (RESPAs). Licensed mortgage brokers are required by law to disclose all fees to any potential borrower in a Fannie Mae designated good faith estimate. Because of such loose regulation in the past, some banks send out a “closing cost worksheet” and collect as much as $400. They will also thinly disguise this fee as a fee to hold or reserve your rate lock. If your interest rate is in fact locked, have them email or fax a copy of the lock registration form showing a time and date stamp for your rate lock and a lock expiration date. Otherwise, your rate as well as your fees almost certainly will change. Most likely at the closing table when you are least likely to back out or you are unable to back out because the moving van is at your house and you stand to lose time and thousands of nonrefundable dollars you deposited in earnest on your new home.
In most cases The David M. Damare’ Team has been able to secure lower rates and credit borrowers this onerous fee back at closing in an effort to reestablish credibility, honesty and good faith in mortgage brokers and lenders.
Please do not pay any bank or lender an upfront fee to provide a good faith estimate. If they truly have a competitive offer and represent someone you can trust and choose to work with then let them make their commission when the loan funds like all other mortgage professionals.
“Mortgage Lending is Our Business: Customer Service is Our Passion.”
Stay tuned and stay in touch with your mortgage professional. Thank you for the opportunity to serve you and your clients. David. 919.851.0999.