Third-Party Fees
Costs charged by entities other than the lender for services the lender requires in the closing process.
Third-party fees include the appraisal, credit report, flood certification, tax service, pest inspection (where required), survey (where required), and various title-related services. These costs flow through the lender's Loan Estimate but aren't lender revenue, they're pass-through charges to outside providers.
Some third-party services the borrower can shop and choose their own provider (most title and settlement services); others the lender selects (typically appraisal and flood certification). The Loan Estimate flags which is which on the Services You Can Shop For section.
Because third-party fees aren't lender revenue, lenders can't always control the final amount. Tolerance rules under federal regulation limit how much they can move between LE and CD, but legitimate changes (a more expensive title commitment, an extended appraisal) can flow through.
Related terms
Other terms you'll see alongside Third-Party Fees
The standardized three-page disclosure a lender must provide within three business days of a complete loan application.
An independent valuation of a property by a licensed appraiser, used to confirm that the home is worth what the buyer agreed to pay.
The fees paid to the title company or attorney handling the closing, including title services and recording.
The collection of fees and prepaid items, separate from the down payment, that a borrower pays at closing.
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