Which of the following is NOT a fee that lenders can charge?

Which of the following is NOT a fee that lenders can charge?

• A. Credit report fee
• B. Appraisal fee
• C. Property tax fee
• D. Warehouse fee

Answer: (C)

The correct answer indicates that a property tax fee is not a fee that lenders typically charge. In residential mortgage lending, lenders may incur various expenses while processing and underwriting a loan, and they often pass some of these costs onto the borrower in the form of fees. Lenders commonly charge fees such as a credit report fee, which covers the cost of obtaining the borrower’s credit history and score from credit reporting agencies. The appraisal fee is also standard, as it pays for the assessment of the property's value to ensure it meets the loan amount being requested. The warehouse fee can be relevant as it pertains to the costs related to short-term lines of credit used by lenders to finance mortgages before they are sold to investors. In contrast, property taxes are obligations paid to the local government by property owners, not fees charged by lenders in the mortgage process. Lenders might include an estimate of property taxes as part of your monthly mortgage payment escrow, but they do not directly charge a fee specifically labeled as a property tax fee. This distinction is crucial for understanding the nature of the fees involved in mortgage lending.

The correct answer indicates that a property tax fee is not a fee that lenders typically charge. In residential mortgage lending, lenders may incur various expenses while processing and underwriting a loan, and they often pass some of these costs onto the borrower in the form of fees.

Lenders commonly charge fees such as a credit report fee, which covers the cost of obtaining the borrower’s credit history and score from credit reporting agencies. The appraisal fee is also standard, as it pays for the assessment of the property's value to ensure it meets the loan amount being requested. The warehouse fee can be relevant as it pertains to the costs related to short-term lines of credit used by lenders to finance mortgages before they are sold to investors.

In contrast, property taxes are obligations paid to the local government by property owners, not fees charged by lenders in the mortgage process. Lenders might include an estimate of property taxes as part of your monthly mortgage payment escrow, but they do not directly charge a fee specifically labeled as a property tax fee. This distinction is crucial for understanding the nature of the fees involved in mortgage lending.