Home-buying is all about preparing for the financial obligations you will incur in order to avoid unnecessary surprises. So, what fees should you expect when considering purchasing property?
Did You Know?
The down payment is the largest fee associated with purchasing a home.
Lenders will charge up to 2% of the loan amount for your origination fee.
Finally, conventional loans typically have lower loan origination fees, but generally require more money down.
General Lending Fees
- Underwriting fee;
- Processing fee;
- Application fee
Some lenders bundle these fees together and others charge the fees individually.
Down Payment Benefits
Every loan option comes with it’s own list of financing pros and cons, which is why it is so important to consider all your options and then pick a plan that works best for your specific financial needs.
Small Down Payment: ability to purchase sooner, save more money for other ventures, and avoid depleting your bank account.
Large Down Payment: receive lower rates and premiums, avoid mortgage insurance, lower your loan’s debt-to-income ratio.
What Should You Do?
Always consult your loan offer to help you determine how much you can expect to pay towards loan origination and closing costs.
Make sure your lender provides you with:
An estimated closing cost statement – a break down all the associated fees for purchasing your home.
Statement of any title and escrow service fees – which typically adds up to around 1% of the purchase price of the home.