Of course, every soon-to-be homeowner expects a number of fees when applying for a mortgage, but do you know about all of the ones which can catch you out later down the track? When it comes time to take on a mortgage, it’s reasonable to expect to pay fees. After all, there is a range of checks and balances which your lender needs to complete. However, there are many which can catch you unawares, leaving you in a potentially sticky situation.
Taking on a Mortgage? Make Sure You Know About These Fees
Taking on a Mortgage? Make Sure You Know About These Fees
Just Some of the Lesser Known Mortgage-Related Fees
Below is a great article from Speedy Title and Escrow Services, LLC regarding some of the fees which you should not only be aware of but potentially budget for.
Rate Lock Fee
You’ve seen them in print advertisements and on television - promises that a mortgage lender can and will lock in a ‘great value interest rate; for the entirety of your loan term. And while this can appear like a win/win type deal, the reality can be very different. Accompanying these offers is often a hefty fee which is applied if you want to break the rate lock. Why would you want to do this? Because, just like all things, once you have bought it and locked it in, there will be a better offer which comes along almost immediately after. In the case of a mortgage, it’s a fluid interest rate market. This means that should interest rates become remarkably lower and you want to take advantage of them, you can expect a fee to break your rate lock.
Property Valuation Fees
This one can often seem like a double fee. After all, you have likely paid this fee to your own professional to ensure you are getting a good deal or at the least, are paying the market rate. And despite how thorough your report is, you can bet that your lender will want their own professional to complete the same process. This means that they will be charged a fee and they will, in turn, pass it on to you.
Redraw Fee
One of the many features which lenders are offering is the ability to redraw (or re-borrow) against any additional payments you have made, or in some cases, against any scheduled payments you have made. This can be a great option for homeowners who are looking to make improvements to their home without having to save any additional payments. However, you can be sure that for each and every redraw instance there will be an accompanying fee. In many cases, this fee can be the difference between whether or not the option is actually valuable or put them behind with their payments. If you are about to purchase a property, be sure that you have completed your own due diligence and that you have taken steps to protect your title and home ownership. To find out more, speak with an expert at Speedy Title and Escrow Services, LLC by calling (586) 739-2233 about the benefits of title insurance in Clinton Township, MI and how title insurance in Clinton Township, MI can protect you against unwanted title ownership issues.
Break Fee
If your lender doesn’t offer the ability to redraw against your mortgage and you see an advertisement for a separate lender which does, it can be tempting for many homeowners to transfer their remaining or outstanding payments to another lender. However, this will almost certainly attract a fee, and reasonably so. You see, when a lender decides on whether or not to approve your application, how much interest they can expect to earn greatly affects their decision. As you can imagine, if you were to take your remaining payments elsewhere you will also be taking their projected earnings or profits with it, leading to each lender charging a (sometimes quite substantial) fee.
Discharge or Settlement Fee
To finish off the list is a fee which you can expect to pay at the maturity of your mortgage. It is called a discharge or a settlement fee, and it isn’t necessarily a fee which all lenders will charge. This is the fee which is charged at the end of your mortgage and is used to cover the payment of any fees or administration charges that the lender may face in discharging your mortgage.
Protect Your Investment with Clinton Township, MI
Before you sign any paperwork, be sure to speak with a professional at Speedy Title and Escrow Services, LLC by calling (586) 739-2233 to find out how title insurance in Clinton Township, MI can protect your home ownership.