When considering your financing options, you’ll want to review many different things about the loans
offered to you. In this blog you’ll find a basic overview of home loan fees and the things you should
consider as you shop for a lender or loan.
Most loans have fees in addition to the total amount you are borrowing to finance your home. You can
sometimes borrow the money needed to cover these fees, but that will obviously increase the overall
amount of debt you undertake. Some fees are paid up front, and others are not due until closing.
The lender or broker can charge you points on your mortgage. One point equals 1 percent of the loan
amount. These are simply fees paid to the lender or broker that are often linked to the interest rate, and
are usually paid in cash to the lender or broker at closing. A lender may offer you a lower interest rate, but
charge more points, so it’s important to compare offers.
Loan Origination Fees
The institution that actually loans you the money will generally charge on origination fee for processing
the loan. They are often expressed as a percentage of the amount of the loan.
Certain lenders will charge a fee to investigate your creditworthiness and determine if you are likely to
repay your loan.
Typically paid at closing, a mortgage broker may charge you a fee in addition to the origination fee. If you
are working with a broker, be sure to check with them what their fee is.
Transaction / Settlement / Closing Costs
These fees lump together several charges for: application fees, title examination, abstract of title, title
insurance, property survey fees, deed preparing fees, other mortgage fees and settlement documents,
attorney fees, recording fees, notary fees, appraisal fees and credit report fees.
First-Time Home Buyer Tips
Never hesitate to question a fee that you don’t understand. Your lender should give you a thorough explanation and make sure that you know what you’re paying for. Certain fees, like the broker’s fee or the amount of points assessed on a loan are negotiable. It never
hurts to ask your leader if they can get you a better deal.
Oh…wait, you can skip all those fees if you use Keller Mortgage (NMLS #140234), plus $1,000 at closing!