Learn About Mortgage Fees

Learn About Mortgage Fees
Mortgage fees and terms can be confusing and frustrating.
Mortgage and financing terms are like another language.
Yet, if you have a firm grasp of at least some essential
terms, the more you can potentially save yourself in
headaches and money. You should start by looking at the
mortgage fees or costs; what fees are legitimate, and what
fees you should be wary of, with a few lessons of wise
financing along the way.

The mortgage origination fee - This fee is basically what
the broker charges for doing the loan. A fair and normal
fee is usually in the neighborhood of 2% or less. Unless
your loan is very complicated, the 2% fee is high and you
should look elsewhere. With the market the way it is
today, brokers need and want your business, and you can
afford to be picky in choosing whom you finance with.
Lesson number one: this is a significant debt you are
undertaking, ask questions and don't let yourself be
intimidated into paying more than you should!

The mortgage appraisal fee - This is a fee that is
unavoidable for the purchase or refinance of any home. An
appraisal must be done by a licensed appraiser. You are
paying for it so be sure to obtain a copy of the appraisal
for your own records. The cost for the appraisal can be in
a range from $300 to $500, depending on the state and the
appraiser.

The mortgage processing fee - A hired loan processor or an
outside source may be used by a broker to process your
loan. This fee is not a junk fee because the processors
handle all the detail tasks for the loan. They work hard
at ordering the title, the insurance, the appraisal and
putting together all the documents for the lender. The fee
should not be more than $400.

The credit report - Every home loan requires that a credit
report be done on the potential borrower. You must take
care in choosing a broker because most of them will pull a
credit report as soon as your social security number is
presented and a large number of inquires on your credit can
hurt your credit score. A lender may pay for a credit
report for their broker, so be sure to get a copy of your
credit report and make sure it is something the broker
actually paid for to charge you for. The brokers cannot
charge a credit report fee unless they are actually being
charged a fee by the credit agency. The fees normally
range from $12 to $20 per borrower.

The mortgage underwriting fee - This fee is charged by the
lender for underwriting, closing and funding your loan.
Sometimes referred to as the Administration Fee, this is
how the lender makes its up-front profit on your loan and
it usually can't be avoided. If the broker is charging the
underwriting fee you should not agree to pay it without a
reasonable explanation of its validity because brokers do
not underwrite your file. Don't be confused into paying
any fees that don't seem to be honest charges. Ask tons of
questions to secure the best deal on your home loan. Most
brokers are scrupulous enough to offer you the best deal
and the market is not in such frenzy as the last two years
and significant deals are out there.

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Peter Kenny is a writer for The Thrifty Scot, please visit
us at http://www.thriftyscot.co.uk/Loans/ and
http://www.thriftyscot.co.uk/mortgage/