Mortgage Approval: Know the Fees You’ll Have to Pay

Buying a new home is so exciting – you may be upgrading from a rental, or maybe you’re moving into a bigger abode or even your dream home.

Everything comes with a cost, however, and the price for your nicer digs will come with fees – lots of them. Your mortgage approval will include these fees, as well as closing costs.

Understand exactly what you might have to pay will help mitigate the sticker shock. Learn all about the fees that come with mortgage approval and closing on your new house.

Here’s What to Expect for Home Buying Fees

The fees that come attached to your mortgage approval all have to do with getting your ducks in a row. These fees come with peace of mind.

Fees You’ll Probably Have to Pay

These are the most common mortgage approval fees that you can expect.

1. Credit report fee. You need good credit in order to get approved for a mortgage. This fee goes toward pulling your official report.
2. Appraisal. In a home sale, the lender almost always requires a home appraisal from a licensed professional. The amount you’ll pay will vary depending on the home size and loan type.
3. Inspection. The inspection isn’t required, but it’s always risky to skip it.
4. Survey. If no survey of your property already exists, you’ll have to pay to get one done. This is a common state requirement before you can get a loan.
5. Title search. A title search ensures that there are no conflicting interests or regulations that will interfere with your purchase, such as liens on the property (outstanding legal claims).

Home Buying Fees You Might Have to Pay

You may or may not have to pay the following fees based on your lender and the type of loan you’re getting.

1. Application fee. A small fee attached to your loan application.
2. Origination/processing fee. Some lenders will charge you this fee to prepare your mortgage. Some won’t.
3. Flood certification. This fee applies if the lender wants to find out if your home is within a flood zone.
4. Mortgage points. Points are fees that you pay directly to your lender to reduce your interest rate. These are also called discount points.
5. Underwriting fee. To approve you for a loan, your lender has to research the risk of lending to you. The underwriting fee takes care of this, but sometimes it’s bundled with the origination fees.

For Buying a New Home, Fees Come with the Territory

Purchasing a new home is full of ups and downs. All the fees you have to pay in order to get your mortgage approved are just some of the downs. It’s best to understand what you’ll pay at the outset so you’re prepared when the time comes to sign on that dotted line.