Common Lending and Mortgage Fees in the Washington, D.C. Area
July 17, 2016
July 17, 2016
- Application Fees. As the name suggests, buyers pay this fee at the time they first apply for a purchase money loan—and it’s usually not refundable, whether or not a loan is granted (or accepted by the buyer).
- Origination Fees.These fees are paid to the broker or mortgage company that acts as intermediary between the borrower and the lender who provides the money for the loan. Origination fees customarily average 1-3% of the loan amount.
- Document Preparation Fees. As the name suggests, these fees (which normally range from $50-$200) pay for preparation of the loan documents.
- Appraisal Fees. Before making a loan, lenders require an official appraisal of the home the borrower wants to buy, to ensure the house is worth the purchase price (or, in some cases, the amount of the loan). Appraisal fees run $200-$600, depending on the lender, appraiser, and property being appraised.
- Underwriting Fees.Like origination fees, underwriting fees average 1-3% of the total loan amount. These fees pay the lender for a variety of services, including a variety of loan research, underwriting, and funding services.
- Flood, Survey, & Inspection Fees. These fees pay for flood reports, property surveys, and similar reports and inspectionsthe lender uses to evaluate the property before making a purchase money loan. Fees in this category range from a few hundred dollars to almost a thousand, depending on the area, type of property, and lender requirements.
- Credit Report Fees.Lenders will want to view the borrowers’ credit report before agreeing to grant a loan; the credit report (which normally costs around $50) will also impact the terms a lender is willing to offer.
- Points are fees (typically valued at 1% of the loan amount per “point”). Buyers often pay optional “points” to reduce the interest rate of a home purchase loan.