what You must know About Mortgage Loan Expenses

Are you confused on how to get the best mortgage Loan to finance your home purchase? Are you are planning to refinance your existing mortgage? If your answer is Yes,then the first steps that you need to do is to take a closer look on different mortgage expenses.
There are two major types of mortgage expenses: recurring and non-recurring. Recurring expenses are the fees you have to pay each month for the entire lifetime of your home loan. On the other hand, non-recurring mortgage expenses are the one-time costs that you have to pay when you secured the home loan.

Recurring Mortgage Expenses
Recurring mortgage expenses are costs you have to pay monthly. The property tax for example is a recurring expense. If the lender pays the property tax through an escrow, you will be required to fund the initial balance. You may also pay the property tax directly to the office of the local tax collection agency.

Hazard insurance may also be required by the lender. Again, the lender can set up an escrow to pay the insurance and you have to fund this account. An upfront payment worth a few months of premium may be collected by the lender for fire and hazard insurance. If there is no escrow account, you will be required to maintain regular premium payments for hazard insurance to cover your home.

Non-Recurring Mortgage Expenses

The origination point is one of the most common non-recurring mortgage expenses. A point represents one percent of the home loan. This point is also known as the broker fee. Another non-recurring cost is the loan discount fee. This fee would be similar to origination point. This is the premium that you have to pay if you want to lower interest rate.

You must also pay a one time fee for pulling your credit report. Almost all lenders require a tri-merge credit report from borrowers obtained from three major credit bureaus. The property appraisal must be paid also. Your lender will hire an appraiser to determine the value of the property and you have to shoulder the professional fees.

Processing fees are also included in the non-recurring mortgage expenses category. These fees will pay for the processing and documentation of the home loan. A loan processor will take care of these things and will serve as the go between with all parties concerned.

Other non-recurring expenses include the title insurance fees, document fees, underwriting fees, and escrow or attorney’s fees. Title insurance technically protects the lender and ensures that you will get clean title for the property. Document fees cover the costs for printing and handling your loan documents. Underwriting and escrow charges are professional fees for those who will render services for handling your home loan.
In summary,there is monthly mortgage payment,you have to pay the monthly interest charges and the principal of the loan unless you have an interest only mortgage.The mortgage should be paid monthly or bi-monthly.
It is very important to know mortgage loan expenses.Understanding the cost of the loan will give you an idea on how to save money when you apply for a mortgage. If you know mortgage expenses,you will be able to choose the best loan offer from different lenders.