There is a lot of money being exchanged during the home buying process. In fact, sometimes there are so many different fees and payments that it is hard to keep track of all of them. While many of these fees are valid, there might be some fees that your mortgage lender is trying to sneak past you. First Fidelis is here to describe a few of the fees that other mortgage lenders might not be so upfront about.
If you work with a real estate agent or mortgage broker, they will make a commission on the purchase of your home. While these fees are normal, you might want to shop around to make sure that you aren’t overpaying in commission fees to everyone involved. Additionally, some mortgage brokers might try to push loans with worse terms on you to up their commission. Be aware of all of your options before determining which loan you want to take out on your home.
Home Inspection Fees
You want to know of any potential issues with the home you are about to purchase. This means that you need to have the home inspected. During the inspection, you will find out if there is any structural damage to the property that would make the home dangerous or unlivable. It usually costs between $300 and $500 for a home inspection, but the exact amount will depend on the home and the area the home is in.
Credit Report Fees
Every lender you contact will want to know your credit score. With every credit score check, your score might be affected a little bit. Unfortunately, it also costs money for the financial institutions to check your credit score. While some of the lenders might cover this fee, others will pass it on to you. The credit report fee could range from $30 to $50.
Document Preparation Fees
Lenders spend a lot of time providing loan estimates, which is why they often charge administrative fees called document preparation fees. These fees often cost between $50 and $100, but with all of the other fees you might have to pay, it can seem like a steep bill to add to your total. In some cases, you may be able to negotiate this fee away, but understand that this means that the lender will have to eat the cost and might be unwilling to negotiate other parts of your deal. If the cost is too much, the lender might be able to include this fee as part of your loan, but you will eventually pay a lot more for it.
Loan Origination Fees
One of the largest fees you might be stuck with during the home buying process is the loan origination fee. This fee is how mortgage lenders make money. Usually, this fee is one percent of the total loan amount, so expect to pay at least that for the loan origination fee.
Homeowners’ Association Fees
While these fees aren’t set by the mortgage broker or lender, you should at least be told about them prior to purchasing a home. Maybe you won’t be required to pay any HOA fees at all, but if you are required to pay these, it is a good idea to know prior to signing for the property. It is also important to note that these fees vary greatly from neighborhood to neighborhood, so it is hard to estimate just how much you could be paying for HOA fees.
Title fees are put in place to make sure that the title is transferred from the seller to the buyer as smooth as possible. The first fee that could be associated with the title is the title search fee. This fee covers the cost of the time that it takes the title company to search the property records to make sure that there is no other claim to the property.
Your local recording office may also issue a fee to record the purchase to make it a matter of public record. This fee will depend on where you live.
Title insurance may also be required by your lender. This fee protects the amount of money that the lender is providing you in the loan. You can also purchase owner’s title insurance to protect your investment in the home.
While there are other fees associated with purchasing a home, these are some of the most commonly overlooked by home buyers.
To work on a mortgage with First Fidelis means that you have access to more than a dozen different mortgage lenders. At First Fidelis, we try to find you the best deal possible with one of our lenders. Give us a call today at 913-205-9978 to get started.