Nikia, Home Owner in Chicago Heights, IL

Can a broker charge for buying down a point before the closing?

Asked by Nikia, Chicago Heights, IL Tue Jan 11, 2011

Why is it a friend went to a company and she was charged for verification of her employment and paid 1,000 dollars for to buy down her note. This was before the closing.

Help the community by answering this question:


Hi Nikia,

Have your friend talk with a real estate attorney regarding this matter. Something may be lost in translation. Some EMPLOYERS are charging for verification of employments and up front fees for appraisals are not uncommon. Knowing the full story would reveal if something was done improperly or not.

The information in this answer provided by Attorney Ranj Mohip is general information and is not intended as legal advice, nor does the attorney intend to create an attorney-client relationship with any reader by answering this question or otherwise contributing as a member of
2 votes Thank Flag Link Tue Jan 11, 2011

Is this the same "broker" you were asking another question about on Trulia? So now I'm guessing you're talking about a "mortgage broker". Your other question that everyone is answering is assuming you were talking about a "Real Estate Broker"
0 votes Thank Flag Link Tue Jan 11, 2011
I also have never heard of paying for employment verification, I wonder if she confused that with paying for an appraisal. Buying down a loan rate is very common, but paying for it up front is unusual. It use to be that 8 discount points would equal a 1% rate drop, in other words 8 discount points = 1% less in the loan interest rate and 4 discount points = .5% drop and 2 points = .25% etc. Buying down the loan rate for $1000 would have dropped it 1/4% or so I would guess, but normally that is added to the points on the HUD1 sheet at closing, not POC (paid outside of closing).
0 votes Thank Flag Link Tue Jan 11, 2011
There usually is no charge for a VOE (verification of employment) that is part of every mortgage process. A person can choose to buy down their rate, but with rates already at all time lows, they should not need to do so this late in teh mortgage process. They may want to have their agent or attorney review what is going on or call the state banking commission.

Please see my blog with tips and advice regarding getting a mortgage
0 votes Thank Flag Link Tue Jan 11, 2011
Never heard of either of those happening! It's usually a good idea to stick with a main-stream lender! Any lender that charges fees up front . . . . .run away!
0 votes Thank Flag Link Tue Jan 11, 2011
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