The Loan Estimate is required to be fairly accurate. Some fees have to be right on the money. With some other fees, lenders have some leeway to charge more than estimated. Here’s a summary:
The lender’s origination charges have to be accurate. At closing, these fees can’t exceed what was on the Loan Estimate. These fees are listed in subsection A in the “Loan Costs” section on Page 2.
At closing, the charge for any fee listed in these sections cannot exceed what was listed here in the Loan Estimate.
Charges for 3rd-party services that you can’t shop for can’t exceed what was on the Loan Estimate. These services may include the appraisal, credit report, flood certification, flood monitoring, tax monitoring, tax status research and others. These fees are listed in subsection B in the “Loan Costs” section on Page 2.
At closing, the total charges for all the fees listed in this section cannot exceed the estimate by more than 10%.
There is a group of fees that, when added together, may exceed the total in the Loan Estimate by up to 10%, but no more than that. These charges include recording fees, plus services that you shopped for, using the lender’s written list of service providers. These services may include the survey, pest inspection, title search, title insurance and title agent or escrow agent.
When you add all of the fees in this group together, the amount you pay can’t exceed the amount in the Loan Estimate by more than 10%. Note that this applies to adding all these fees together; it doesn’t apply to individual fees.
Some charges don’t have an accuracy requirement: prepaid interest, property insurance, escrow payments and any 3rd-party service that you selected, but which was not on the lender’s written list of service providers.
Lenders are allowed to charge less than the amounts listed in the Loan Estimate.
Although lenders have some leeway to underestimate some fees, there is little incentive for them to do so deliberately because of the prospect of punitive fines levied by the Consumer Financial Protection Bureau.
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