Do You Know About These Common Mortgage Fees?

Of course, every soon-to-be homeowner expects a range of general mortgage related fees, but there are plenty more which can often catch buyers unawares down the road. If you are about to meet with a mortgage lender then you will likely expect to pay a range of fees, mostly for services which the lender incurs which are then passed on to you, as an applicant.

Lesser Known Mortgage-Related Fees

However, there is also a range of lesser known fees which can often leave homeowners at a financial disadvantage during their mortgage duration. Below is an article from Patriot Title Agency with just some of those fees you can consider budgeting for.

Rate Lock Fee

Despite what you may think, the mortgage lending business is a competitive one - especially when there aren’t many borrowers making applications. This is the reason why you see many lenders advertising perks and additionals to their mortgages, such as the ability to ‘lock in’ a special or fixed rate throughout the entirety of the mortgage. However, as is the nature of interest rates, there will be times when the current rate becomes lower than the attractive rate you locked in. When this happens and you decide that you want to break your ‘rate lock’ and take advantage of fluid interest rates, there will be a fee attached to such an allowance.

Early Exit Fee

Speaking of breaking your agreement, there will also be times when you come in a large amount of money or you simply save up an amount with the idea to pay off your mortgage early with one large payment. While this may seem like good news, there will be a fee attached to such an exit. You see, when a lender assesses your mortgage they will take into account the amount of interest they will earn throughout the term. If you were to pay out the mortgage early than these calculations go out the window and the lender is left short-changed. To recover some costs, a lender will charge an early-exit fee. While it won’t be the equivalent to the interest they would have earned on our remaining payments, it is likely to be substantial. Before you sign any paperwork, speak with a friendly professional at Patriot Title Agency by calling 1-866-475-3005 to find out just how important title insurance in Canton, OH is to the process, and how title insurance in Canton, OH can help protect the ownership of your title and home.

Late Payment Fee

Of course, on the other side of the above fee there is a late payment fee. This, as you can guess from the name, is a fee which is not only charged, but is charged each time that you are late making a payment. While it may seem small, the challenge comes in that these fees can easily accumulate if you begin to lose track of your payments and can add begin to add significant addition to your original mortgage. The best way to avoid this fee in its entirety is to make your acgreed and scheduled payments throughout your mortgage.

Redraw Fee

One of the perks which a lender may provide is the ability to redraw against your mortgage. The amount allowed is often linked to the number of additional payments you have made, or it could allow you to redraw against scheduled payments made. If you do decide to redraw against your mortgage, be mindful that this fee is added on after you have taken your redraw, often adding significant additional time to your mortgage end-date.

Break Fee

It’s the age-old problem; You buy an item and then almost immediately afterwards, you see a store offering the same product for a lower price. This can also happen with mortgages, with many lenders offering a range of offer and alternatives, including the ability to transfer your existing remaining mortgage to their own offerings. As appealing as these may be, it is important to include a ‘break fee’ in your calculations when deciding on whether or not to transfer your mortgage to another provider. The reason for this fee is simple and similar to the early exit fee mentioned above, in that it results in your current lender losing out on their projected interest from your mortgage.  For many mortgage holders, this break fee can often alter the calculations significantly, leaving them to stay put with their current provider.

Don’t Get Caught out - Get Title Insurance in Canton, OH

Available only prior to settlement, title insurance in Canton, OH can provide security over the title ownership of your investment and your home. To find out more about how title insurance in Canton, OH can protect you, pick up the phone and speak with a friendly expert at Patriot Title Agency by calling 1-866-475-3005.