Eight Lender Fees You Should Know

Real_Estate_Bargain_150 Some first time buyers are surprised to learn of some of the fees they are required to pay about which they were completely unaware. There are both additional lender fees, which may vary depending on the lender you select, and government fees which you will pay regardless of the lender you choose. Here are typical lender fees you should know:

Legal fees for lender’s solicitor
Legal disbursements fees
Settlement costs
Redraw and/or Repayment fees
Exit fees
Deferred establishment fees
Non proceeding fees
Property Inspection fees

Not all lenders charge all these fees and the amounts vary so they are all variables to consider when you select a lender. Armed with this knowledge, you can ask potential lenders whether or not they charge these fees and how much they are.

First, all lenders will charge you for the services they will provide but some are buried in the rate and others come out as additional line items. Typically, you could expect to be charged the legal fees incurred by the lender’s solicitor as well as administrative fees for postage, title searches, and photocopying.

Settlement costs include property surveys, administrative costs at closing, and assorted other costs, depending on the lender.

Once formal loan approval is granted; if the borrower backs out of the loan they will pay a non-proceeding fee. During the life of the loan some lenders charge fees for additional loan repayments or redraws on available equity in the home.

You can potentially save yourself some money by having a property inspection completed before your lender pays to have the property valuated. If the inspection turns up a problem severe enough to warrant canceling the sale, you will save yourself the valuation or non-proceeding fee.

One thing to keep in mind in this discussion is that as a general rule of thumb, you can expect more lender fees with lower rate mortgages. Some lenders operate on the principle that buyers are attracted by the rate, and will not closely examine additional fees. In fact, smart consumers who know how to compare the true costs of the loan often find a higher rate mortgage to be more cost effective than some lower rate mortgages.