The borrower is responsible for paying the underwriting fee in a financed real estate transaction.
What is the underwriting fee?
- An underwriting fee is a payment made to a company in exchange for taking on a risk.
- A business earns a fee for underwriting a public offering or placing an issue on the market through securities underwriting.
- Underwriting fees may be charged by lenders to cover the costs of originating, processing, underwriting (of course), and completing your mortgage.
- In short, the underwriting fee is a closing expense paid directly to the lender by the borrower to cover their overhead and administrative costs and to profit from your mortgage.
- It is calculated as a reduction from the new issue price.
Therefore, the borrower is responsible for paying the underwriting fee in a financed real estate transaction.
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