What are the fees associated
with home loans?
There are normally many fees involved with a home loan, such
as loan origination or underwriting fees, transaction, and
broker fees, settlement, and closing costs. Every lender should
be able to give you an estimate of their fees. Many of these
fees are not set in stone and are negotiable. Some fees are
paid when you apply for a loan (such as application and appraisal
fees), and others are paid at closing. In many cases, you
can borrow the money needed to pay fees, but doing so will
increase your loan amount and total costs. Loans that are
"no cost" are sometimes available, but can usually
involve higher rates. Know that several items may be lumped
into one fee so you may want to ask what each fee includes.
Ask for an explanation of any fee you do not understand. Sometimes
you even assume there are fees added on to your closing statement
that were not. You can miss payments on property taxes and
insurance premiums if you do not clearly ask everthing that
is being added up for fees. My advice is to never assume!
The lenders have to get paid some way and its best to find
out where their fees come from so you can compare lender to
lender and broker to broker.
Compare Mortgage Lenders
Add On Fees and Points.
Averages for mortgage rates nationwide do not include add
on fees known as points. 15 and 30 year mortgages each carried
an average fee of 0.7 points this week. One year ARMs carried
a 0.6 point average. More
What are Points? Discount
and origination points of the total loan amount the lender
uses to leverage a lower interest rate. Points are fees paid
to the broker or lender for the loan and are often linked
to the interest rate. In most cases, the more points you pay,
the lower the rate. Depending on your given situation as it
Are Mortgage Points worth paying
Depends on how long your loan is for. If you do not intend
on living in your house for long then ask for a no points
loan. If you intend on living there for 30 years or so then
the points to bring down the mortgage rate may be worth the
for a Mortgage Loan Now!
More questions answered in
BankLady.com Credit 101: What
are Second Mortgages? | What are Home
Rate Mortgages means more homeowners | What
is an ARM?