If you have spoken with friends and family who have been through the mortgage application and approval process then it’s reasonable that you have heard a lot of nightmare stories about rude agents and unexpected fees.
And while this article isn’t here to help you find the right estate agent, it is here with some information on common fees you can expect and should budget for.
When you buy from the Groupon Coupons page for Birchbox you know that you will receive high-quality items. When buying a home, however, it isn’t so simple. Your mortgage lender will want to verify the condition, quality, and value of any property they are considering providing the funds for. For this, a property inspector will be hired to attend the hoes and prepare a report.
While it is a fee that you will have to pay, it can also provide you with benefits. For example, it can act as a great second opinion to your own building inspection report you will have acquired.
Loan Application Fee
That’s right, you will need to pay just to apply for an application. Why? There are a lot of steps involved in assessing somebody’s creditworthiness, many of them administrative, many of them provided by third parties, and almost all of them will attract a fee. This fee is in turn passed on to the application.
The cost of the fee will largely depend on the type of broker or lender you use. If a lender often sees clients who fail their credit check, the cost may be higher to cover an expected failed response.
Early Repayment Fee
Everybody who has a mortgage wants only one thing; pay off the mortgage. And the quickest way to do this is to make early and additional repayments towards the debt. However, as beneficial for you that may be, your lender isn’t likely to feel the same way.
When a lender considers an application, how much money they will make from your interest is included in their calculations. When you make early repayments, their projected profit is reduced. As you can imagine, this isn’t a loss that a lender is prepared to take.
For this reason, the majority of lenders will charge an early repayment fee to help recoup any lost interest. The rate of the cost will depend on the lender. Even if you don’t intend to make additional payments, be sure to ask about the existence of this fee before you apply.
When it comes to a mortgage application, this is in no way an exhaustive list of the fees that you can expect to encounter and pay. However, it is a good start to help begin and prepare your budget for what’s ahead. Along with this information, ask your friends and colleagues about their experiences. In particular, be sure to ask about any fees which they feel were surprises and not explained to them by their lender.