The costs are high enough to finance or refinance a home without paying tips or gratuity to the parties providing the services. Obtaining a new mortgage can cost thousands of dollars not including the interest paid over the life of a loan. Several different parties provide the services required to obtaining a loan, but these parties receive appropriate compensation from their employers for their work. All closing costs must be reflected on the HUD-1 closing statement for all federally regulated mortgages.
Every mortgage loan requires that a notary public attend a closing. At one time, anyone performing notary public services could not receive any compensation for their service. The laws barring a company from paying for notary public services no longer apply. In some areas of the country it became common practice to provide a tip to the mortgage closer, who is a notary public, because it was the only way to compensate him for his time. This is a dying practice that only survives in a handful of closings, mainly in the northeast part of the United States.
Loan officers should not ask for or expect a gratuity. Loan officers work for the mortgage company or mortgage broker who arranges the mortgage financing. Some mortgage companies receive compensation equal to 2 percent or 3 percent or more of the loan amount for obtaining the loan. On a $200,000 mortgage, this equals between $4,000 and $6,000. While loan officers may not receive all of that money, they generally receive 50 percent or more.
Home appraisers visit the home, measure the home and prepare an appraisal report for the lenders review. The appraisal company charges between $200 and $600 or more depending upon the appraisal required. Appraisers are licensed professionals who do not expect, and may not even accept a tip or gratuity. In fact, if an appraiser accepted a cash gratuity, it could be seen as the borrower's attempt to influence the appraised value on the home. This could cause the appraiser to lose his license and his livelihood.
Title companies or title attorney offices close most mortgage loans. Most states use title companies but some states require home loans close with a title attorney. The title attorney may not be the one who actually closes alone; it’s likely to be one of her assistants or employees. The loan closer receives payment from his employer and the borrower already pays a loan-closing fee as part of the standard closing costs.