What are the lender’s fees on a mortgage loan?

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If you’re thinking about starting the home buying process, you probably already know that there are a lot of moving parts. In addition to saving for a down payment, there are also a host of additional costs you’ll need to be prepared for.

Closing costs are just a set of additional fees that go into finishing your loan process. Lender fees, probably a lesser-known aspect of buying a home, are also extremely important to understand.

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What are mortgage lenders fees?

“Lender Fees” is an umbrella term that refers to the various fees associated with processing, approving and funding your loan. These types of costs are basically a subset of the closing costs of buying your home.

While these types of fees typically include application fees, origination fees, processing fees, and underwriting fees, the full list of what counts as lender fees will vary depending on the financial institution you are dealing with. you get your loan.

The lender’s fees can amount to around 1-2% of the loan amount. According to ValuePenguin, homebuyers pay an average of $1,387 in lender fees when buying a property. While that might not seem like a ton of money, especially when compared to the amount you put up front as a down payment, these fees can still be significant when buying a home on a shoestring budget.

Keep in mind that there will also be a host of other fees that make up your closing costs, including credit report fees, transfer fees, title insurance, rate lock fees and registration fees, among others. According to Rocket Mortgage, closing costs can be up to 6% of your loan amount. In other words, if you take out a $400,000 mortgage, you’ll have to pay up to $24,000 in closing costs alone.

If you’re hoping to save on lender fees, consider looking for mortgage lenders whose lender fees encompass fewer fees.

Ally Bank, rated a top mortgage lender by Select, actually charges no application fees, origination fees, processing fees or underwriting fees. Although the company may charge appraisal and registration fees instead, and charge for title search and insurance, you will at least save a little on other costs.

Allied bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, HomeReady Loan and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a HomeReady loan

Advantages

  • The Ally HomeReady Loan allows for a down payment of just under 3%
  • Pre-approval in just three minutes
  • Submission of the application in less than 15 minutes
  • Online support available
  • Existing Ally customers are eligible for a discount that applies to closing costs
  • Does not charge lender fees

The inconvenients

  • Does not offer FHA, USDA, VA or HELOCs loans
  • Mortgages are not available in Hawaii, Nevada, New Hampshire or New York

It will take some shopping to find lenders that reduce your lender fees as much as possible. While there’s a good chance you’ll end up with a slew of lender fees, you may still be able to save money in other areas.

SoFi members who apply for a SoFi mortgage can get a $500 rebate on their home loan — and those who buy a home through the SoFi Real Estate Center, which is powered by HomeStory, can receive up to $9,500 in cash back. silver.

SoFi

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional loans, jumbo loans, HELOC

  • Terms

  • Credit needed

  • Minimum deposit

Advantages

  • Quick pre-qualification
  • Provides access to mortgage officers for advice
  • $500 off for existing SoFi members
  • 0.25% price reduction when you lock in a 30-year rate for a conventional loan
  • Offers up to $9,500 cash back if you buy a home through the SoFi Real Estate Center

The inconvenients

  • Does not offer FHA, VA, or USDA loans
  • Mortgages are not available in Hawaii

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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