Is this breakdown of Mortgage Broker Fees reasonable?

Asked by Johnjohn, San Francisco County, CA Thu Feb 24, 2011

Hello All,

I'm looking at a $600K conforming loan and wanted to see if the following fees were reasonable to expect and if any were negotiable:

Application/Processing $500
Underwriting $700-900
Appraisal $400-$600
Credit report $30
Flood $40
Tax service $75

I have top notch credit and the loan will have no yield spread premium in exchange for paying one point. The fees I'm most concerned about are the two at the top of the list. Reasonable on top of the one point? Which fees go to the lender and which go to the broker?

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Jackie Cuneo, , San Francisco, CA
Mon Sep 23, 2013
These fees are very typical.

A broker can be paid either with Borrower Paid compensation or Lender paid compensation. The point is likely the broker's compensation and these itemized fees go direct to the lender.

If you want to pay 0 points you can usually request that of the broker, in exchange for a slightly higher rate.

The broker rates are lower than the retail rates for whatever lender the broker is using--so it should not cost you any more to use a broker than to go to the retail branch.

The GFE (Good Faith Estimate) is the most important place for you to see what your fees are and what the compensation to the broker will be.
0 votes
Jackie Cuneo, , San Francisco, CA
Thu Feb 24, 2011
Hi John,

Congratulations on your purchase or refi!

If you're going through a mortgage broker, generally the Application/Processing and Underwriting fee goes to the lender, the appraisal goes directly to the appraisal management company designated by the lender, credit report is an actual charge passed through from the reporting agency. The flood and tax certificate items are items required by the lender. Your broker will be compensated by your point and/or YSP.

You should ask your broker to explain all fees thoroughly to you, but if you're just looking for a second opinion, it does appear from this list that none of these fees would be paid to the broker, and they all appear to be standard fees (if not a little lower) than we see in the industry.

Jackie Cuneo, Mortgage Advisor, Opes Advisors
0 votes
Michael Young, Agent, San Francisco, CA
Thu Feb 24, 2011

The fees you've listed are all within a normal and accepted range. Only the application fee may go to the broker. The u/w is usually for the lender. The rest go to the third parties who provide the service or report.
0 votes
Carl Henker, , 95928
Thu Feb 24, 2011
Application fee goes to Broker, underwriting may go to Broker or lender? You would have to ask the Broker who gets the fees. As far as reasonable they are within a normal range. If you want to negotiate you can but only the App and UW fee may be negotiable, the other fees are paid to third parties and are just pass through cost. Don't expect much give by the broker as they have to cover their cost to stay in business. Go with it and get your loan closed before rates move higher. Good Luck
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