Which mortgage fees are negotiable?
This page does not coach a negotiation. It shows what the Loan Estimate form itself says about who sets each charge and which providers you choose.
The charges on your Loan Estimate are set by different people. Your lender sets its own fees in Section A (Origination Charges, on page 2) and prices the rate, including any points or credits. Some services are ordered by the lender, some you can pick yourself, and a few charges are set by government. Prepaids and escrow are a separate kind of money that goes to several places.
Read The Loan Estimate, line by line and How much are lender fees on a mortgage? for the related details.
Knowing who sets each charge tells you which numbers can differ from one lender to the next and which will look about the same on any Loan Estimate. Here is the map, section by section.
Who sets each charge
| Section | Who sets it and what can change |
|---|---|
| A, Origination Charges | Set by the lender; cannot increase after you say you intend to proceed. |
| B, Services You Cannot Shop For | The lender picks the provider; cannot increase after you say you intend to proceed. |
| C, Services You Can Shop For | You may pick the provider; capped at 10 percent in total only when you use a provider from the lender's written list. |
| E, Taxes and Other Government Fees | Transfer taxes have zero tolerance. Recording fees share the 10 percent total limit with the covered Section C services. |
| F to H, Prepaids, Initial Escrow and Other | These amounts can change; they are outside the zero-tolerance and 10 percent groups. |
A permitted changed circumstance can allow a revised Loan Estimate for affected charges. The 10 percent cap combines recording fees and the covered Section C services. See the CFPB's closing-cost tolerance rules.
Section A: the lender's own charges
Origination Charges are what the lender charges to make your loan: an origination fee, underwriting, processing, application, and any discount points. The lender sets these prices itself, which is why two lenders can quote different Section A totals to the same borrower for the same loan. Once you tell a lender you intend to proceed, the origination charges on that Loan Estimate are held to zero tolerance. Points work differently. They follow the rate, so they can change until your rate is locked.
Points and credits: the rate side of Section A
Discount points are prepaid interest you pay at closing to lower your rate. One point equals 1 percent of the loan amount, so one point on a $300,000 loan is $3,000. Lender credits work in the other direction: you accept a higher rate, and the lender puts money toward your closing costs. A quote with points and a lower rate and a quote with no points and a higher rate are two positions on the same scale, and they are best read together.
Section C: services you can shop for
Section C lists services you are allowed to shop for, usually title work and the settlement agent, and sometimes a survey or pest inspection. If you use a provider from the lender's written list, the Section C charges together can rise no more than 10 percent between the Loan Estimate and closing. If you choose your own provider, that cap does not apply, and the price is whatever you agree to with that provider. This is the section where the choice of provider is yours.
Sections B and E: set by others
Section B covers services the lender chooses and you cannot shop for, such as the appraisal and the credit report. These charges are held to zero tolerance and cannot rise at closing without a valid reason. Section E holds taxes and other government fees. Transfer taxes are set by law in your state or county. Recording fees are what the local government charges to record your documents, and they fall in the same 10 percent group as Section C services picked from the lender's list.
Prepaids and escrow: paid ahead, to different places
Sections F and G are money paid ahead of time, and each piece goes somewhere different. Prepaid interest covers the days between closing and the end of that month, and it goes to the lender. The homeowners insurance premium goes to your insurance company. The initial escrow deposit goes into an escrow account that pays your property taxes and insurance as they come due.
How to compare two Loan Estimates
The fairest comparison is a second Loan Estimate for the same loan on the same day. Put the two Section A totals side-by-side. Every lender uses the same three-page form, so each section sits in the same place on both. Read each Section A total next to the rate on page one, since a lower total with a higher rate and a higher total with points and a lower rate describe different trades. The report grades your Section A total against what real loans paid, and your rate against what lenders actually locked.
This page answers the general question. What it cannot answer is where your numbers sit. The AI reads your Loan Estimate line by line and grades your Section A total and your rate against this same public data, priced for your credit, your down payment, and your loan type. One upload, one $29 report, and your document is deleted once it is delivered.
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