Origination Fee
An origination fee is a fee charged by a lender or mortgage broker for processing your mortgage application. This fee covers the administrative costs of underwriting and approving your loan. Origination fees can range from 0.5% to 1% of the loan amount, depending on the lender or broker. With an online mortgage broker, you may be charged an origination fee that is slightly lower than what you would pay with a traditional lender, but it’s still an important fee to consider.
Application Fee
Some online mortgage brokers may charge an application fee, which covers the cost of processing your application. This fee can vary from one broker to another and may be refundable if your loan is not approved. Some online mortgage brokers may waive the application fee altogether as a promotional offer.
Credit Report Fee
When applying for a mortgage, your credit report will be checked to determine your creditworthiness. This process incurs a fee, which is typically passed on to the borrower. Some online mortgage brokers may charge a credit report fee, which can range from $20 to $50. It’s important to note that this fee is not a broker-specific fee and would also be charged by traditional lenders.
Processing Fee
A processing fee covers the costs associated with processing your mortgage application. This fee is intended to cover the cost of verifying your employment, income, and assets. Some online mortgage brokers may charge a processing fee, which can range from $300 to $500. This fee may be higher for more complicated loans, such as jumbo loans or loans with a lower credit score.
Underwriting Fee
An underwriting fee covers the cost of evaluating your mortgage application and making a final decision on whether to approve your loan. This fee is typically charged by the lender and can range from $500 to $1,000. Some online mortgage brokers may include the underwriting fee in their origination fee or processing fee, while others may charge it separately.
Third-Party Fees
In addition to the fees charged by the mortgage broker, you may also encounter third-party fees, such as appraisal fees, title search fees, and recording fees. These fees are charged by outside companies and are necessary to complete the mortgage process. Some online mortgage brokers may include these fees in their overall closing costs, while others may charge them separately.
