What fees on the Loan Estimate have a 10% tolerance?

The fees on the Loan Estimate that have a 10% tolerance include recording fees. This means that for these fees, the final amount charged to the borrower can vary from the amount shown on the Loan Estimate, but only by up to 10% over the estimated cost as disclosed in the initial document.

Understanding the tolerance levels is crucial for compliance with the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) information, as it helps ensure that borrowers are not overcharged and that they have transparency regarding the costs associated with their loans.

When we refer to recording fees specifically, these are typically a fixed charge that a local government imposes to record a mortgage or other legal documents. Due to their standardized nature, the 10% tolerance applies, allowing some flexibility in estimating these costs without significant penalties for the lender if the fees do exceed the original estimate but remain within that 10% margin.