What Costs or Fees Are Associated With Loan Origination Process?
The home buying process can be an expensive one, depending on your location. Along with budgeting for principal, interest and property taxes, the actual loan process has several fees attributed to it. This paperwork process takes several people to complete, including your main lender contact. Take a look behind the scenes to understand the fees associated with a typical loan origination process.
Underwriting Costs
Your loan needs to be written out by real estate professionals specializing in law. From property lines to financial terms, the loan outlines your rights and limitations regarding the structure and land. Along with drawing up the documents, they must be printed and evaluated by several professionals to ensure that all wording is correct. You will end up with a large stack of paperwork that must be signed in the right areas for the property transfer to be legal and complete.
Home Appraisal Charges
The lender does not appraise the home directly, but contracts a professional appraiser in the real estate industry. Each region has a slightly different economy offering various appraisal charges. Your lender should go over these charges before the appraisal begins. You may be able to hire a more reasonable appraiser if you feel the cost is too high. Be present at the appraisal as well to ensure that they evaluate all aspects of the property.
Running Your Credit Report
Depending on your credit situation, your credit report can be several pages long. Lenders must charge you for the credit report, especially because each bureau may charge an individual fee for their information. This particular fee should not be too high, such as $40, compared to other fees that are several hundred dollars each.
Extenuating Circumstances
Once you begin the loan origination process, your fees are non-refundable. If you change your mind about a property, you must still pay these associated fees. The lender is still collecting, writing and evaluating documents on your behalf. If you decide that a property is not for you, the loan process has already begun. Although the process stops the moment you decline to continue, the full fee amount is still due to cover the lender’s time and materials.
Talk to your lender about all the loan origination fees associated with your mortgage. Lenders should be able to give you a breakdown of all the fees, from copy paper charges to appraisal costs. There are no hidden costs within this loan process.
