Bare with me on the first part of my explanation

                One seemingly complicated aspect about financing a property is the HUD form that discloses the fees involved with the transaction; there can be a lot of fees. There are necessary fees such as title company fees and generally an underwriting fee; then there are the fees collected on your behalf this would include the monies collected to reestablish your escrow account. More often than not the lender will require that you have an escrow account (there are some exceptions) these monies are collected and held in an escrow account to pay your annual insurance bill and your property taxes which in Colorado is  generally paid out twice a year, ½ on February 28^th and the other ½ on June 15^th. The timing on this can make a big difference in the amount that needs to be collected. For the taxes the closer you are to the date the taxes are due the more they are going to collect at closing to make sure there is enough to pay them when they are due. The amount needed for the escrow of your insurance depends on the anniversary date when your annual payment for your insurance is due. Also collected at closing on your behalf is the interest from the day you close tell the end of the month, so if you close at the beginning of the month they are going to need to collect more than if you close toward the end of the month (*if you are paying off an FHA loan it’s best to close at the end of the month).  NOW , for the other fees. OK now there is the appraisal fee, this is a necessary fee that due to the new mortgage industry rules needs to be collected and paid for upfront to an Appraisal Management Company or AMC this fee is around $370.00 unless you have a Jumbo or unusual property. We’ll have another Blog addressing this new rule the HVCC; Home Valuation Code of Conduct (it’s really not good). The remaining in my case FEE is my origination fee, this is what I make. For most other lenders it’s FEE’S there can be origination fee, credit report fee, processing fee, admin fee and in some cases even more fees. MY philosophy and the way I do business is my origination fee includes the credit report (**usually $25.00) I process my own loans so I don’t charge a fee for that.  The admin fee and those other fees are to collect more money from you with a different label, and I don’t operate like that. Now when you see other lenders offer free appraisals or some kind of closing rebate or discount, we all know that the appraisal gets paid for somewhere in the process and usually what they do is credit you at closing to make sure it’s paid for in case for some reason it doesn’t close. Nothings free it all gets accounted for one way or another. They way I prefer to do business is to quote the lowest fees from the beginning. The only fee collected before closing is the appraisal fee and that’s paid to the AMC not to me (because of the new rule it’s the new protocol). I do not undercut my fellow mortgage brokers to steal business. I prefer to take the professional high road on this one. There are good hard working brokers that provide a good service with reasonable fees; even though I rarely get beat on fees if I’m given the opportunity to give a second opinion I well be honest and upfront with you. Sometimes it’s not worth switching for a hundred bucks. Now don’t get me wrong competition is good and that’s why I always give my best quote and do not need to go back and change fees in order to compete for your business. I don’t want to get to long winded here so I’ll continue this on the next blog. Have a Happy Halloween.

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