While it’s fair to expect a range of basic mortgage-related fees when making your application and payments, there is also a range of lesser-known fees which can often catch homeowners unawares.
If you are about to meet with a mortgage then you can reasonably expect to pay fees. These basic fees often cover administrative charge switch your lender incurs during their processing. However, there are also fees which homeowners aren’t always made aware of and ones which can catch them out during their mortgage term.
Lesser Known Mortgage-Related Fees to Know About
Below is a great post from Riva Title Company with just some of the lesser known fees you can expect to encounter during your mortgage term and some which you may want to consider budgeting for.Establishment Fee
The best place to start is with the very first fee that you are likely to encounter - the loan/mortgage application fee. While this can often be seen as the ‘just to collect a fee, fee’, it actually has a solid purpose. When you apply and are approved for a mortgage, your lender needs to complete and verify a range of checks and balances as part of their due diligence. This can include registering your mortgage with a required body, accessing a range of credit information, along with all of the fees which they will be charged in assessing and approving your mortgage. As you can imagine, a mortgage lender won’t want to cover these fees themselves and instead will pass them on to you. While you may not like it or even the idea, in reality, this fee does cover genuine services provided to your lender.Rate Lock Fee
While you may not think of it like this, the reality of the mortgage industry is that it is competitive. For this reason, there will be many times where a lender will offer the option to ‘lock-in’ an attractive interest rate. However, as with all things related to a mortgage, there is a fee attached for this if you break the agreement. This is often done under a range of circumstances, however, it mostly occurs if there is a significant shift in interest rates, drawing them lower then your agreed rate. If you are interested in locking in a rate, be sure to speak with your lender about any fees which are attached should you change your mind later down the track. However, it’s worth noting that once you break this rate-lock, the lender is unlikely to offer it again. Available only prior to settlement, title insurance in Miami, FL is one of the most important aspects of a homeowner's due diligence and one which can provide invaluable protection in the future. Speak with a friendly professional at Riva Title Company by calling 786-787-7888 to find out more about the benefits of title insurance in Miami, FL and how title insurance in Miami, FL can help to protect your title and home ownership.Property Valuation Fees
Just as you will want to ensure that the property you are buying is a good purchase, so too will your lender want to confirm that, in the event that you cease making payment and they are forced to foreclose on your property, the property value and sale price will be sufficient for them to recover any and all costs remaining. Even if you have already had your property appraised professionally, each lender will want the same process undertaken by their own assessor who will charge them a fee, which is in turn passed on to you.Redraw Fee
Depending on the type of mortgage you choose and the lender who provides it, there may be an option for you to redraw from your mortgage to the value of any additional payments made, or even against the scheduled payments agreed to. If this option is available to you through your mortgage then there will be a fee attached, which is considered a redraw fee.Break Fee
Throughout the duration of your mortgage, you will often see advertisements for a range of alternative mortgage options with conditions more appealing than your current arrangement. In addition, many of these services will offer you the ability to transfer your existing mortgage over to themselves. However, as you can imagine, a current lender isn’t going to like the idea of losing planned interest and will likely charge a fee to allow you to move your remaining finance to another mortgage provider.Don’t Forget Title Insurance in Miami, Fl
It can be easy for a homeowner to overlook important aspects of their due diligence when proceeding through the home buying property. However, these are often the most important aspects and can often lead to serious trouble down the track. Speak with Riva Title Company at 786-787-7888 to learn more about title insurance in Miami, FL and how taking out a comprehensive title insurance policy can help protect your homeownership.
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