Many of the costs associated with a Real Estate transaction are fixed. Other than trying to build in a Seller Assist/Credit the Buyer/Borrower has little or no control over them. Some of the costs that fit into that category are;
Then there are costs involved that may be negotiated. Typically these are related to the financing of the property. When I say may be negotiated I mean 'may'. Most Lenders charge fees that are pass throughs of fees which they are charged and most have fees to cover expenses for processing, underwriting and the like. These fees are generally an integral part of the Lender's pricing (rates & points) matrix. A Lender may be unwilling to reduce or waive fees because they've already offered a competitive rate. But it doesn't hurt to ask.
If you find a rate that you feel is competitive, here is what you might normally see in fees that a Lender may charge. Fees much higher than these ranges would be a bit excessive and you might want to point this out. If they won't budge contact me and let's see how we stack up!!!
Application Fee: $275 - $350 This is normally a pass through sort of fee BUT be sure that this covers the cost of the appraisal & credit reporting. A sneaky Lender's rep will charge this and still charge for appraisal & credit report at closing. When this is questioned they will produce these bills and indicate that you need to pay for them since it was for your loan. You're at the settlement table... what are you going to do??? You pay them, you want to settle, you got snookered! You'll grumble about it later.
Tax Service Fee: $79 - $102 This is a pass through fee that the Lender is charged by the service that collects and pays out taxes & insurance for the borrower. (that's you)
Federal Life of Loan Flood Certification: $10 - $25 This is a pass through fee that the Lender is charged by the service that performs the Federally required flood certification. There are only a few of these agencies across the country so the fee doesn't vary much.
Document Preparation Fee: $250 - $425 This is a fee that the Lender charges as kind of a catch all to recover various costs associated with processing the loan application. Some of the costs include; Automated Underwriting Fees, costs associated with service fees to be able to use some of the services available to the Lender to expedite an approval quicker, overruns on credit reporting costs and just general expenses. Typically the Lender charges what they think is acceptable in their marketplace. In other words, if we think we can get more we'd probably charge more.
Commitment Fee: $150 - $350 This is a fee that is very much like the Document Preparation Fee above just for different types of loans or the terminology is more acceptable in a particular state. Just don't get stuck paying both the Doc Prep Fee and a Commitment Fee.
That's about it for standard run-of-the-mill fees/costs. If you are seeing additional fees called Underwriting Fees, Warehouse Fees, Funding Fees, Wiring Fees, etc., etc. question them. You may have some lee-way on some of the fees noted above depending on how competitive the Lender is willing to be, but if there are other fees being charged, they are generally just to make up for maybe quoting you a lower rate/points. They'll make it up that way!
Watch out for what may sound like a low rate but then have high fees. Generally not worth it. In addition, watch for big spreads in the APR (Annual Percentage Rate) versus the actual interest rate. If you are working with a zero point loan, let's say, the APR should only be somewhere around .15% to .2% higher than the actual rate. If it's more, look for hidden fees.