difference in reporting requirements is why you’ll see an enormous difference
in a GFE from a broker versus a GFE from a lender. The costs from the broker may seem high when
in reality brokers are able to offer “lender credits” to offset the charges.
The most important factor to consider when
comparing GFE’s is using an apples-to-apples comparison. Compare the quoted interest rate, term, loan
type, and required funds to close. Many
times brokers can offer lower rates and lower required funds to close even
though the total costs may be higher than what’s disclosed on a lender
GFE. Don’t fall into the trap of only
looking at the total cost of the loan. Origination
fees are one of the largest fees paid in connection with a mortgage; however
other fees will be discussed in subsequent posts.
legislation was enacted to ensure that consumers were paying origination only
once on a single transaction. This can
be confusing for consumers because even though new laws exist lenders are still
not required to disclose any back end compensation or origination tied to the
interest rate formerly known as “yield spread premium” (YSP) or “service
release premium” (SRP). However,
mortgage brokers are required to fully disclose any front-end AND back-end
Here at Allegiant Mortgage, LLC we are a full service broker. This means we have more than one set of programs or underwriters. We work with over 20 lenders giving us more lending power to help those who need it whether you're a low score borrower or in the market for a jumbo loan. Let us help you today!
mortgage loan often involves many fees, such as: lender’s origination or underwriting fees,
broker fees, and fees for services the lender requires to originate your loan.
In addition, other settlement costs are required, such as initial escrow
payments if you establish an escrow or impound account, taxes, government fees,
recording charges, and title insurance fees.
is an origination fee?
fee is what the lender or mortgage broker charges the borrower for making the
mortgage loan. Origination services include taking and processing your loan
application, underwriting and funding the loan, and other administrative
services. Origination charges are listed in Block 1 on the Good Faith Estimate
(and Line 801 of the settlement statement), and generally cannot increase at
closing. This charge is the biggest
difference between a broker GFE and a lender GFE.
If you need help with your new mortgage, call Allegiant Mortgage, LLC today!
Good Faith Estimate (GFE) is a form that lists basic information about the
terms of a mortgage loan for which a consumer has applied. The GFE includes the estimated costs related
to the home loan and provides basic information about the loan itself, which helps
lender or the mortgage broker must provide a GFE within three (3) business days
of receiving the loan application or other required information. Loan Fees
(except for credit report fees) cannot be charged until a GFE is received and
the borrower indicates that they plan to take out the home loan. GFE’s are considered private information and
cannot be provided to real estate agents without the client’s prior consent.
why use Allegiant?
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