guarantee fee

USAGE SUMMARY

The phrase "guarantee fee" is correct and usable in written English.
It can be used in financial or contractual contexts to refer to a fee charged for providing a guarantee or assurance. Example: "The lender requires a guarantee fee to secure the loan agreement."

✓ Grammatically correct

Formal & Business

News & Media

Academia

Human-verified examples from authoritative sources

Exact Expressions

25 human-written examples

Guarantee fee means one percent of a guaranteed note's average annual unpaid principal balance.

Cornell University

It's an add-on rate known as the guarantee fee.

The New York Times

One way to avoid the guarantee fee is to use a lender that does not sell off its loans — for instance, a community bank or a credit union.

The New York Times

He'd spent almost a thousand dollars on two different accounts between February, 2013, and May, 2015, including an "affair guarantee" fee of two hundred and fifty dollars.

The New Yorker

It would collect a guarantee fee, as would the "private credit enhancer," which the commission says would raise the cost of mortgages to some extent.

The New York Times

Not perfect, but creative Pozen did applaud the guarantee fee charged by Fannie Mae to the banks and brokers, because this fee is currently determined by the government.

Massachusetts Institute of Technology

Human-verified similar examples from authoritative sources

Similar Expressions

35 human-written examples

Moreover, it does not charge guarantee fees appropriately adjusted to reflect these risks.

The New York Times

Helping to defray the cost was $36 billion generated through an increase in mortgage guarantee fees charged by Fannie Mae and Freddie Mac.

The New York Times

But no information was given on how much of last year's $15.8 million of guarantee fees included in-house payments.

The New York Times

If you account for guarantee fees, this means lenders could theoretically offer rates as low as around 4 percent, Mr. Findlay said.

The New York Times

Fannie and Freddie charge guarantee fees as a form of insurance against default for the loans they acquire and resell to investors.

The New York Times

Expert writing Tips

Best practice

In legal or contractual contexts, ensure the "guarantee fee" is explicitly defined to avoid ambiguity regarding its purpose and application.

Common error

Avoid using "guarantee fee" interchangeably with terms like "application fee" or "processing fee". "Guarantee fee" specifically refers to a charge for the guarantee itself, not the administrative processes.

Linguistic Context

The phrase "guarantee fee" functions as a noun phrase, typically acting as a subject or object within a sentence. As shown by Ludwig AI, it identifies a specific charge associated with a guarantee, usually in financial or contractual contexts.

Expression frequency: Common

Frequent in

News & Media

45%

Formal & Business

30%

Academia

25%

Less common in

Science

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

The phrase "guarantee fee" is a grammatically sound noun phrase commonly used in financial, business, and academic contexts to refer to the cost associated with providing a guarantee. Ludwig AI confirms its proper usage and provides numerous examples from authoritative sources such as The New York Times, Forbes and BBC. While the phrase is widely understood, it's important to differentiate it from other fees and ensure clarity in its application to avoid confusion. Alternatives like "assurance charge" or "security deposit" may be appropriate depending on the specific context.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

assurance charge

Focuses on the cost associated with providing an assurance.

collateral fee

Highlights the fee related to providing collateral as a guarantee.

security deposit

Refers to funds held as security against potential losses or damages.

warranty premium

Emphasizes the payment required for a warranty that acts as a guarantee.

surety bond cost

Specifies the cost of obtaining a surety bond, which serves as a guarantee.

underwriting fee

Focuses on the fee for underwriting services, often involving risk assessment and guarantees.

risk mitigation charge

Focuses on the cost associated with reducing risk through a guarantee or similar mechanism.

insurance premium

Highlights the fee for insurance coverage, providing financial protection as a guarantee.

protection fee

Emphasizes the fee for protective measures, such as guarantees or insurance.

contingency fee

Refers to a fee charged only if a specific outcome or success is achieved, offering a form of guarantee.

FAQs

What does a "guarantee fee" cover?

A "guarantee fee" typically covers the cost associated with providing a guarantee or assurance, such as in loan agreements or financial products. It compensates the guarantor for the risk they undertake.

How does a "guarantee fee" affect mortgage rates?

An increase in the "guarantee fee" can push up mortgage rates on new loans, as the lender may pass the cost onto the borrower.

Is a "guarantee fee" the same as mortgage insurance?

No, a "guarantee fee" is not the same as mortgage insurance. While both provide protection to the lender, a "guarantee fee" is a one-time or ongoing charge for the guarantee itself, whereas mortgage insurance specifically covers losses from borrower default.

What are some alternatives to paying a "guarantee fee" on a loan?

One way to avoid a "guarantee fee" is to use a lender that does not sell off its loans, such as a community bank or credit union, or explore options that might charge an "upfront funding fee" instead.