Buying a home is an exciting experience that will make you feel a great sense of accomplishment. It’s important to know what you’re getting into when you buy, however. Mortgage fees have a way of sneaking up on you, but they won’t if you’re aware of them beforehand. These are five fees that you’ll have to face if you intend to buy a home.

Processing Fees

A processing fee is one fee you may come across in the home buying process. The fee pays the lender for reviewing all the details of your application and then approving your loan. These mortgage fees could be as low as $300 or as much as $500.

Appraisal Fees

At some point, you will have to have someone appraise the home. An appraiser will visit the property, walk through it, and asses its value. You will have to pay a fee for the appraiser’s time and fuel expenses. Appraisal fees can be as high as $500, but will be dependent on your future home’s location.

Origination Fees

You will also have to pay an origination fee if you’re fortunate enough to qualify for a home mortgage loan. It’s a payment that goes to the mortgage lender for “originating” your loan. Originating is just a fancy term that means they gave you the money. Sometimes a processing fee will be included in an origination fee, along with the underwriting fee and funding fee. Most origination fees equal about one percent of the total loan amount. If you borrow $100,000, you’ll have to pay the mortgage lender $1,000, for example.

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Tax Services Fees

Property taxes are expenses that affect every new homeowner. You’ll have to pay property taxes to your municipality every year you own the home. A tax service fee is a fee that goes to the organization that ensures that you get your property tax bills. It may seem backwards that you have to pay a fee when you’ve actually paid your taxes, but it’s a way for the lender to ensure that you are being responsible with all of your home and property payments. These mortgage fees are on the lower end and usually only cost between $25 and $50.

Flood Certification Fees

You’ll want to ensure that your new home is not in an area that’s prone to floods. As such, you’ll also need certification that it isn’t in such an area. You may have to pay a fee to the company that conducts the research and provides that information and documentation to you and the lender. Fortunately, flood certification fees will not break your wallet. They’re usually less than $50.

Don’t Be Surprised By Mortgage Fees

Those are a few of the mortgage-related fees you may have to pay. The list is not exhaustive so you may have to pay additional fees. Although the fees seem extensive, keep in mind that most of them are in place to protect both you and your chosen lender. The best strategy for covering these costs is to set some money aside for those fees so that you won’t get caught off guard in the end.

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