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.
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 about Mortgages
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 states below.
Are Mortgage Points worth paying for? Sometimes. 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 costs