How do I know if the fees are fair?

The best way to determine if the fees being charged are fair is to compare them before you ever decide on a lender or loan.

Take your time when you shop lenders. Get Good Faith Estimates from them. A Good Faith Estimate lists the fees you will be charged by a specific lender for a specific loan. Though things like interest rates and points may fluctuate on a Good Faith Estimate, the other fees shouldn't.

As you gather information from more and more lenders, you.ll be able to compare the various fees. If one lender.s fees seem extremely high, or he's charging you for something the others aren't, ask for an explanation. And don't be afraid to keep asking questions until you're satisfied and are certain you understand his explanation.

The degree to which you take matters into your own hands, gathering information and asking questions, is the degree to which you can be sure the fees you end up paying are fair. It takes time, diligence, and a certain degree of assertiveness, but it's worth it in the long run.

When you begin comparing loans and fees, we recommend that you use some kind of spreadsheet. The titles on the columns would be something like:

  • Lender
  • Type of Loan
  • Discount Points
  • Origination Points
  • Application Fee
  • Appraisal Fee
  • Credit Report Fee

And then each row would have a particular lender:

  • Lender A
  • Lender B
  • Lender C

This type of grid will give you an excellent snapshot of the fees charged by various lenders, and will help you quickly identify anything out of the ordinary.