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How do lender get paid..how much?

I am seriously considering buying a home. I know i need to obtain a mortgage through a lender, my question is how much does the actual lender add onto what I borrow? Is it a lump sum? or paid as I pay the mortgage? by from , . Jun 9th 2010 Reply


Gregorio Denny (GVDenny)
#258 ranked lender in California - 380 contributions

Lender fees are part of your closing costs. They can be paid by you at closing, paid by the seller as negotiated, or they can be covered by the lender/broker by paying a slightly higher rate. The best option will be different for everyone so it's best to speak with a local broker to see what works for you. Shop for Orange County brokers here on Lender411 and get a few estimates.

Jun 9th 2010
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Akali Dennie (adennie)
#54 ranked lender in Florida - 196 contributions

David, we are a Direct Lender, FREEDOM MORTGAGE, and can arrange a loan where you do not have to pay us. You would only have to pay a processing fee and appraisal. If you have great credit, we possibly may be able to get your rate under 5%. We are licensed in all 50 states and would love to email you a quote. www.Mortgage-FHA-Rates.com. Hope this helps.

Jun 9th 2010
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Michael Pinter (mpinter)
#23 ranked lender in New York - 2 contributions

David,Ususally, the borrower does not pay anything and the fee to the originator is paid by the lender. The lender does not add anything, they make money off of the interest that you pay every month.Michael Pinter

Jun 9th 2010
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Bruce Conn (BruceConn)
#278 ranked lender in California - 19 contributions

Remember the 3 rules of buying real estate? Location, location, location. The mortgage industry has its own 3 rules - the customer pays, the customer pays, the customer pays. Period. You may pay through interest, points ("origination fees", "broker fees", "discounts", "adjustments" (ie for a condo, cash out, or high LTV), and "buydowns"), and prepayment penalties. How could it be otherwise? The fees are earned because by raising the rate to the consumer a premium is created. This is not a practice limited to brokers or bankers - it is universal. A little old lady makes an investment in her mutual fund, the mutual fund salesman gets a commission, his manager gets an override, the mutual fund itself earns a fee, the Wall Street brokerage that packaged the loans into a Mortgage Backed Security gets a fee, the banker who sells the package to FNMA gets a fee, his firm gets a fee, FNMA earns a margin for funding the loans, the FNMA executives get (huge) bonuses, the mortgage banker earns a margin for collecting hundreds of loans and packaging them, the owner of the mortgage operation funding the loan gets a fee, and the loan officer gets a fee. All of the above practitioners earn their money from the difference between what the little old lady earns and what the consumer pays. Cynical? Not at all. Just about every industry operates on some variation of this theme. So, it is not a reason not to borrow, it is not a reason not to do business with someone you trust. It is just the truth. Best of luck and I hope everything works out in your favor. Bruce Conn.

Jun 9th 2010
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Rudi Hofmann (CaPortfolioLoans)
#282 ranked lender in California - 380 contributions

Fees can be paid as a lump sum or the lender can pay by increasing the rate or a combination thereof. With a purchase it can't be included in the financed amount. .... Happy funding, Rudi

Jun 11th 2010
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