When you were dreaming about your new home as a child you certainly weren’t giving any thought to the mortgage that you would need to take on to buy it. Of course, you certainly didn’t think about any of the fees which would come with this mortgage!
However, as you approach the time to buy your first home you are quickly realizing that there are many fees involved in the process that you need to budget for. Below is some information on some of the most common ones you can expect to encounter.
Hang on! What? A fee just to apply?
That’s right. The first fee that you will need to budget for and pay is the fee just to apply for your mortgage. While this can seem like nothing more than a fee for fee sake, there is actually a reason behind it.
In order to accurately assess your application, each lender will need to make a range of checks and confirmations with a number of third-party providers. As you can imagine, each of these providers will charge a fee for their service which s in turn passed on to the applicant in the form of an application fee which you will end up paying.
Early Repayment Fee
If you have high hopes of paying off your mortgage early then you should first ask about any early repayment fees.
When A lender processes your application they take into account the level of interest that you will pay as this directly translates to their profits. If you begin to make additional payments over and above our agreed schedule, you’re effectively reducing the amount of interest you pay.
While this is good for you, it certainly isn’t good for your mortgage broker as it directly affects their income. For this reason, most lenders will charge you an early repayment fee each time that you make a payment that isn’t on your schedule. The amount of the fee will vary, but you can rest assured that there will be one.
Property Inspection Fee
When you shop at the Groupon Coupons page for Nordstrom you know that you are buying high-quality products. When you buy your house, however, your lender doesn’t have the same level of assurance that the quality will be high.
For this reason, they will require you to pay a property inspection fee to obtain a valuation report. This report is then used by the lender to determine if the property is worth the value of the mortgage and if they will be able to recover any losses by selling the property should you cease to continue your repayments.
While this can seem like double handling as you likely already obtained your own report, you should consider this as a forced second opinion. After all, you want to make sure that the property you are buying is at a good price.
There is no denying that buying a house is expensive, however, the trick to managing the fees it to plan for them and include them in your budget. Keep the above fees in your mind when you are arranging your finances and be sure that you are ready for the fees ahead!