Understanding the Basic Mortgage Fees and Costs Involved
Nothing can be as confusing as the legal jargon in the mortgage industry, especially to a first timer in the industry. It can be hard to tell apart and understand one financial term from another if not for anything else because they are very many and complex.
You should know that in the mortgage world there are 5 basic types of fees associated with mortgages that you ought to understand clearly, and understand the effect they have on your loan. It pays to understand these fees as you can end up saving yourself lots of frustrations and your hard earned money especially if you know how they work and how they are applicable and in what situations.
Mortgage appraisal fee – when putting up a home for sale or looking to refinance an existing mortgage, there is a normal fee applicable known as a mortgage appraisal fee. This is a fee charged by licensed appraisers and is a must if a house is to be sold or refinanced. Depending on the location of your property, the appraisal fee can range anywhere between $300-400 and is solely your responsibility as a mortgage borrower to cover the mortgage appraisal fee.
Credit report fee – if you have been doing mortgage comparison shopping you know that a credit report is a must-have requirement. Lenders always get this report from the credit bureau
And then end up charging you a fee of around $10-20 depending on the mortgage lender. So you can protect yourself from unnecessary or unlawful charges ensure it is only your lender who obtains your credit report… not any other middle man in between.
Origination fee – this is a starting fee charged by a mortgage broker involved in the process of helping you obtain a mortgage loan. The average rate of an origination fee is normally around 2%, of course a reasonable rate considering the fact that there is so much involved in the process which can be time consuming and even very expensive for a first timer in the industry. This is not to say the rate is fixed, there are always high fees and will be depended on the specific mortgage broker that you are dealing with so you want to search further if you find the fee exorbitantly high.
Mortgage processing fee – this is another fee that lies on you as the borrower, and can be as much as $400-500. As the name would suggest, this fee is charged by a third party service provider or a professional loan processor and will always be authorized by your lender.
Mortgage under-writing or administration fees – this is another fee that you are expected to pay in order to cover the closing costs, to cover the underwriting amount and funding your home loan. Note that this is the first profit a mortgage lender gets from you for simply helping you get a home loan.
Take your time to familiarize yourself with legal terms, financing terms and other mortgage fees involved so as to know exactly what you are getting yourself into when dealing with brokerage agencies and mortgage lenders.
You should know that in the mortgage world there are 5 basic types of fees associated with mortgages that you ought to understand clearly, and understand the effect they have on your loan. It pays to understand these fees as you can end up saving yourself lots of frustrations and your hard earned money especially if you know how they work and how they are applicable and in what situations.
Mortgage appraisal fee – when putting up a home for sale or looking to refinance an existing mortgage, there is a normal fee applicable known as a mortgage appraisal fee. This is a fee charged by licensed appraisers and is a must if a house is to be sold or refinanced. Depending on the location of your property, the appraisal fee can range anywhere between $300-400 and is solely your responsibility as a mortgage borrower to cover the mortgage appraisal fee.
Credit report fee – if you have been doing mortgage comparison shopping you know that a credit report is a must-have requirement. Lenders always get this report from the credit bureau
And then end up charging you a fee of around $10-20 depending on the mortgage lender. So you can protect yourself from unnecessary or unlawful charges ensure it is only your lender who obtains your credit report… not any other middle man in between.
Origination fee – this is a starting fee charged by a mortgage broker involved in the process of helping you obtain a mortgage loan. The average rate of an origination fee is normally around 2%, of course a reasonable rate considering the fact that there is so much involved in the process which can be time consuming and even very expensive for a first timer in the industry. This is not to say the rate is fixed, there are always high fees and will be depended on the specific mortgage broker that you are dealing with so you want to search further if you find the fee exorbitantly high.
Mortgage processing fee – this is another fee that lies on you as the borrower, and can be as much as $400-500. As the name would suggest, this fee is charged by a third party service provider or a professional loan processor and will always be authorized by your lender.
Mortgage under-writing or administration fees – this is another fee that you are expected to pay in order to cover the closing costs, to cover the underwriting amount and funding your home loan. Note that this is the first profit a mortgage lender gets from you for simply helping you get a home loan.
Take your time to familiarize yourself with legal terms, financing terms and other mortgage fees involved so as to know exactly what you are getting yourself into when dealing with brokerage agencies and mortgage lenders.
[posted by : OFP on Apr. 29, 2011]
TAGS: debt, mortgage, fees, cost