Fees are always part of any loan - purchase or refinance. Ask your lender to provide you with a copy of the Good Faith Estimate and/or the HUD Settlement Statement. These statements are an itemized list of all fees. You have a right to know each and every fee listed on these statements.
Ask your loan officer for an explanation of each fee - especially the $795 fee you question. Based on your question, the best I can think of in regard to the $795 fee is a possible pre-payment penalty your lender charges for refinancing within a certain time period. Unfortunately, almost all sub-prime loans have a pre-payment clause which is just another way the lender squeezes more money out of you for breaking up your 30 year marraige with them. Ask your loan officer if the lender (the bank) is charging the fee and why or if the loan officer/broker or some one is charging the fee and why.
Remember, ALL fees must be
reasonable and appropriate. Do NOT accept an answer that is generic, vague or ambiguous. Any honest lender will be able to look at you straight in the eye and give you an honest, straight forward answer. I take the extra step of showing my clients the actual source of the fee so they see it directly form my fee schedules and removes any doubt as to the validity of the fee.
If your loan officer can not give you a reasonable explanation, they may be using a "junk" fee which is a big no-no. I do not know your particular circumstances, such as if you are under a time constraint or some other factor, but, if you feel you are being swindled (hopefully this is not the case) - walk away and go to some one else.
Answer Submitted on Fri, Jan 9 2009
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