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Mortgage Refinancing: Avoid Paying Unnecessary Lender Fees

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If you are currently shopping for a new mortgage you want to avoid overpaying lender fees for the new loan. Using the Good Faith Estimate can help you avoid overpaying lender fees and closing costs for your new mortgage. If you neglect to review the Good Faith Estimate from your lender you could be throwing your hard-earned money away.

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The Good Faith Estimate your mortgage lender is required by law to give you outlines every expense charged for your mortgage. This document itemizes all the charges and shows who they are paid to; pay close attention to what these charges are and were they are going. Use this list to make sure that you are being charge reasonable amounts by comparing the Good Faith Estimates from a variety of mortgage lenders.

Make sure the document the lender provides you is actually a “Good Faith Estimate” and not simply a summary of lender fees. Mortgage lenders are required by law in the United States to give this document; if your lender is stalling or blatantly not providing it you should find another mortgage lender.

The Good Faith Estimate is an excellent tool for comparison shopping for a mortgage loan. If you review this document with a fine tooth comb your lender cannot slip charges or rate changes into your loan contract. Mortgage brokers and lenders often try to disguise fees in their loan contracts; these lenders and brokers are required to give you a Good Faith Estimate within three days of receiving your application. Make sure you carefully review this document and understand all the fees associated with your mortgage.

It is a good idea to keep the original endorsed copy of the Good Faith Estimate provided by your mortgage lender. You can use this document to reconcile fees on your final mortgage contract. If you find changes your lender will need to explain why the figures have changed.

You can learn more about protecting yourself from dirty mortgage lenders by registering for my free Underground Mortgage Refinancing Videos.

Here’s a quick sample to get you started by exposing one of your lenders dirty secrets.

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{ 3 comments… read them below or add one }

J. PECK April 21, 2009 at 7:16 am

I have to restate my question from above and ask for an email response. The question is, being an out of state investor, I have been working with a mortgage lender, who has a one page "lock form". It states at the bottom, that if I sign the form, locking in the term's, and decide, for whatever reason, to not go through with the loan refinancing, that I am obligated to pay him 1 % of the mortgage amount. This is a South Carolina mortgage company. Please advise if this is legal and enforceable ??

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Robert April 22, 2009 at 4:02 am

It's not illegal but if you sign the agreement they could sue you for that fee. It's a ridiculous business practice and one that I would never agree to. There are reputable mortgage companies out there that offer good service and don't try to take advantage of their customers with ridiculous fees like this one. Best to take your business elsewhere.

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Mark Brunworth December 14, 2010 at 7:18 am

I am looking at my GFE. It contains some misc. fees, the two I have a question about are the application fee for $400.00 and a lender fee for $675.00 (org. fee?). Is this application fee or lender fee required by law? I might add that I have a great credit score and have never missed a payment of any sort. I talked with the loan rep. and she told me it is requried by law. The information I have read states that these fees are optional. She referenced a X fee. Which is true? Mark

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