During Noah's purchase transaction, his lender reviews which fees could increase if no changed circumstance occurs. Which item is in the zero-tolerance category?
Correct Answer
C) The lender's underwriting fee for processing the loan
Fees paid to the lender, mortgage broker, or an affiliate for a required service are generally in the zero-tolerance bucket absent a valid changed circumstance. A lender underwriting fee therefore ordinarily cannot increase at closing if nothing justifies a revision.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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