Discount Fee?

[Anonymous]

I was curious, what are the average discount or total lenders fee when shopping for GFE's?  Does $3,700.49 sound a little high or is that standard when dealing with  commercial banks? Thanks.

-Peacemaker.

Message Edited by peacemaker on 07-04-2009 09:53 AM

[Anonymous]

The discount fee is usually a percentage of the loan amount and you can look at it in connection with the rate.  If you get an awesome rate but pay a discount fee, that may be comparable to an average rate with no discount points.  It may be easier for the experts to discern if the $3700 is high or not by looking at it in the context of your GFE.  Just a thought until the experts get to your post.

[DallasLoanGuy]

Look for lender fees to be $1000 - $1300 + origination/discount

origination = profit.you will pay it or accept higher rate

discount =  cost to buy down rate. sometimes abused andjust adds to lender profit.

usually represented as a % of the loan.

[Anonymous]

I don't get this whole discount fee....

I have to pay a fee, because I got a lower rate....doesn't this defeat the purpose of even getting the lower rate to begin with?

Kind of like getting something at the store on "sale" but then having to pay a "fee" for utilizing the sale price.... 

[ShanetheMortgageMan]

You are paying a premium at the time you obtain the mortgage to save more money over the life of the loan.  Is that wise?  Depends on how much the premium is, and how much money you will be saving over the time you plan on having the mortgage for.

[DallasLoanGuy]

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@Anonymous wrote:

I don't get this whole discount fee....

I have to pay a fee, because I got a lower rate....doesn't this defeat the purpose of even getting the lower rate to begin with?

Kind of like getting something at the store on "sale" but then having to pay a "fee" for utilizing the sale price.... 

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i have 30yr fixed at 4% on my rate sheet today

want it? you have to pay a discount fee. otherwise you take the higher rate.

that sale price example is not a good comparison. rates dont go on sale.

 discount fees are optional.... you dont have to buy down the rate