Everyone hates this feeling. You are about to pay for something, still remember seeing the ad for the first time, thinking to yourself wow that’s a great deal. And then magic happens, your invoice includes all those fees you didn’t even think of. Let’s say you found this great deal on a hotel only to realize on checking-out that you ended up paying 30 bucks a day for parking in this hotel.
Well, it can be the same in mortgage, so be prepared and ask for those hidden fees from the get-go. There are also third-parties tied with your broker who get make their money from the deal.
- Lender fees – Like many other places, you will be charged for application fees. Someone needs to pay for the paperwork and the administration, and that would be somewhere from $1,000 to $1,600.
- Mortgage insurance – The broker can even demand this in case of a low downpayment. The insurance cost is attached to the overall amount of the loan you’re getting.
- Title insurance company – The body that determines if the seller can actually sell you the asset clear of damages. It protects you in case of defects and liens. The amount paid is tied to the mortgage itself, usually 0.5% of the purchased price of the home.
- Appraiser – Usually $500 or more that go to a third-party who estimates the value of the desired asset. Watch out, if the appraisal goes wrong – way below the desired loan, you will need to change a few things in your loan terms and maybe get another appraiser.
- Escrow company – The body that acts as the middle person in the transaction. The amount paid is tied to the size of your loan, usually $200 base + $2 for every 1K provided by the loan.