Friday, April 17, 2009

What Are the Processing and Underwriting Fees?

Ever wonder what the processing fee and the underwriting fee are for on a Good Faith Estimate and final settlement statement?

The processing fee pays for the person who does all the paperwork involved in getting a loan into underwriting, taking care of any conditions, and making sure the loan closes. The processor orders the appraisal, the insurance certificate, the flood cert, any verifications that are needed, etc. If the loan officer hires a processor to do this work for him, then the processing fee goes to the processor. If he does the work himself, then he keeps the processing fee for himself. The typical fee for processing is between $350 and $450.

The underwriting fee goes to the lender and pays for the person who determines whether the borrower and the property fall within the loan program guidelines (credit, income, assets, etc.). The underwriter verifies everything that the processor has sent to the lender. The underwriting fee is different for every lender, but typically, the fee is about $625.

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