Is it legal for a mortgage company to use the price of the home to determine fees vs loan amount??

Answer 1

There are many fees invovolved in getting a loan, collectively all these fees are known as closing costs. Most are fixed (such as attorneys, surveys, copies, FedEx, etc) and have nothing to do with the price BUT there is one large fee that does depend on the price of the home. In the US, the "loan origination fee" is typically about 1% of the purchase price although some place do offer a flat loan origination fee or place a cap on the amount for high value homes.

The loan origination fee is negotiable if you are using an independent mortgage broker, but that's typically only done for repeat clients, such as investors and builders. But it doesn't hurt to ask.

Answer 2

Normally fees are a set commodity.

Points are determined by the sale price of the house so if you purchased a house for $100,000 then the points for your loan would be based on that figure with one point being $1000.00.

This is the way mortgage brokers and real estate agents have determined their fees for ages.

I hope this has been of some use to you, good luck.

"FIGHT ON"