Phone: 239.540.7007

Fees to Budget for When Applying for a Mortgage

When you were younger and fantasizing about your dream home the last thing that you thought about was needing to apply for a mortgage just to buy it. If you are at the point where you are budgeting to buy a home, below is a post from Schutt Law Firm with some common fees you should expect to pay and include in your budget.

Establishment Fee

Also known as an Application Fee, this is one of the harder pills to swallow when it comes to mortgage related fees. Namely because it seems ridiculous to pay for an application when there is no guarantee that your mortgage will be approved. However, it is for this very reason that the fee exists. To ensure that you are creditworthy person, each lender needs to complete their due diligence, involving several checks provided by a range of third party companies. Each of these checks comes with a fee which is passed on to you in the form of an establishment fee.

Ongoing Maintenance Fee

Next on the list is the fee charged just to have a mortgage. Well, it’s a little more in-depth than that. Similar to the fee above, this fee exists to maintain your mortgage account, including all administration costs relating to reporting and funds management.

Early Repayment Fee

If you have high hopes of paying off your mortgage in record time, then this is a fee that you should pay attention to. When a lender processes your application, they consider how much interest they will earn from your repayments over the full course of your mortgage. If you begin to make additional payments to reduce the interest, you pay you are effectively reducing their income. As you can imagine, a mortgage lender isn’t going to like this and will often charge an early repayment fee for each payment you make in addition to your agreed payment schedule.

Title Insurance to Protect Your Investment

Any reputable mortgage lender will require a form of title insurance to be purchased to provide financial protection over the title of the property. Speak with Stewart Law Firm at 239 540 7007 to learn more about how title insurance can protect your investment.