Illegal mortgage fees and overcharges
Frequently Asked Questions
Straight answers to the questions we hear most.
Mortgage points, also known as discount points, are an upfront fee you pay to your lender at closing in exchange for a lower interest rate on your home loan. One point typically costs 1% of your total loan amount.
Yes, when a lender calculates your back-end DTI to qualify you for a mortgage, they will include the estimated total monthly payment (PITI - Principal, Interest, Taxes, and Insurance) of the new home loan you are applying for in the “debt” side of the equation.
A mortgage significantly increases your total debt-to-income ratio (DTI) because it is typically a large, long-term debt. Lenders calculate your DTI by dividing your total monthly debt payments (including your new proposed mortgage) by your gross monthly income. A higher DTI can affect your ability to qualify for other loans.
This depends entirely on your lender’s policy. Some lenders may allow multiple recasts, while others may limit you to just one over the life of the loan. You must inquire with your loan servicer about their specific rules.
The numbers on the Loan Estimate are estimates. Some costs can change, while others cannot. For example, the interest rate is only locked if you have specifically received and paid for a rate lock. Certain fees, like the lender’s origination charge, are also subject to a “zero tolerance” rule, meaning they cannot increase at closing unless your application changes.
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