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When Do I Pay the Mortgage Broker Fees?

Knowing when to pay Mortgage Broker fees can help you avoid surprises and plan your budget. You can pay the broker fees during the loan application, at loan approval, at closing, after closing, and you can roll fees into the loan.

 

5 SPECIFIC situations that you can pay the Mortgage Broker fees are listed below:

  1. During the Loan Application
  2. At Loan Approval
  3. At Closing
  4. After Closing
  5. Rolling Fees into the Loan

 


1. During the Loan Application

Some brokers might charge fees when you first apply for the loan.

These fees generally include:

  1. Application fees: For processing your loan application.
  2. Credit report fees: To cover the cost of checking your credit.
  3. Rate lock fees: To lock in an interest rate for a certain period.

Not all brokers charge these, so ask your broker for specifics.

 


2. At Loan Approval

Also, when your loan is approved, some fees may be due.

  1. Broker commission: A percentage of the loan amount.
  2. Processing fees: For handling your paperwork.
  3. Third-party fees: For services like appraisals or inspections.

 


3. At Closing

In addition, most broker fees are paid when the loan closes.

  1. Origination fees: For the broker’s services.
  2. Underwriting fees: For evaluating your loan.
  3. Settlement fees: For the transfer of property.

You’ll find these fees listed in the closing documents, so review them carefully.

 


4. After Closing

Moreover, brokers sometimes get paid by the lender after closing.

  1. Yield spread premium (YSP): A fee for securing a loan with a higher interest rate.
  2. Service release premiums: Payments for selling your loan to another entity.

These fees don’t come directly from you but can affect your loan’s overall cost.

 


5. Rolling Fees into the Loan

You might have the option to include broker fees in your loan amount.

  1. Higher loan amount: Your loan increases to cover the fees.
  2. Interest implications: You might pay more over time due to interest.
  3. Monthly payments: Your monthly payments could be slightly higher.

Discuss this with your broker to understand the long-term effects.

 


Summary:

Understanding when to pay Mortgage Broker fees helps you manage your money better. Whether the fees are due during the application, at approval, at closing, after closing, or rolled into the loan, knowing the timing keeps you prepared. Always ask your broker for a clear fee breakdown to avoid surprises.