When you were younger and dreaming about finding and living in your dream home, you neglected the part where you first needed to get your finances and credit in order and then pay a range of fees to obtain a mortgage just to pay for the dream home.
And with good reason; It isn’t a very romantic part of the process to daydream about.
While you can’t go back and tell your younger self to save money for all of the fees you can expect to pay, it isn’t too late to start saving now so that you are prepared for when the day comes. Below is some information on the most common fees you can expect to encounter during a mortgage application.
The Establishment Fee
Also known as an application fee, this can be a hard pill to swallow for homebuyers who are trying to keep their budget low. However, while you might not like the idea of paying a fee just to apply, there is a reason why it is charged.
To process your application, a lender needs to complete their own due diligence, which often includes a number of checks and balances to ensure they can make an informed decision on your mortgage. This requires them to obtain items like your credit report, which will incur a cost.
All of these small costs add up, and you can bet that your mortgage lender isn’t going to cover them. Instead, they wrap these up and charge in advance as an establishment fee.
Property Inspection Fee