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What are mortgage fees?
Mortgage fees are a combination of all fees associated with getting a mortgage loan. After receiving a mortgage application from a borrower, the lender will draft a good faith estimate(GFE) and give it to the borrower. The GFE will outline the estimated costs and terms of the mortgage offer.
The mortgage fees will vary from one lender to another. However, it is the responsibility of the borrower to examine fees submitted in the good faith estimate. Some lenders and mortgage brokers may include hidden fees on the report.
List of mortgage fees
When you are buying a house make sure that you understand each fee and ask your lender if some of those fees can be waived.
The following are a few of many mortgage fees you should expect to pay.
- Origination fee: This is how much you will be charged for the creation of your mortgage loan. The origination fee is usually between .5% – 1% of the total loan value, as noted by Eloan. This value can sometimes be much higher depending on the credit score of the borrower and the duration of the mortgage.
- Appraisal fee: This is the price you will pay for an appraisal of the house. This cost is usually between $300-$400, according to Bankrate.
- Processing Fee: This fee covers all costs related to the processing of documents during the mortgage process. As noted by LendingTree, the processing fee ranges from $300 to $1500.
- Yield spread premium (YSP): The YSP applies to your mortgage rate when there is no origination fee.
- Flood certification fee: The homebuyer must buy flood insurance if the house they are buying is in a flood zone.
- Tax service fee: According to Wallet Hub, the tax service fee is a fee given to an external party who will monitor your tax account to make sure that you are not falling behind on your taxes. The third-party will alert the lender if you miss payments.
