Mortgage Costs

When we are in the market for a new home we often forget to budget for other costs as part of a mortgage loan, not just the purchase price.  Here are some charges that could be a part of closing a mortgage loan:

• Application or Origination fee: Covers administrative work required to process your home loan application and price of borrowing money.
• Appraisal: Covers the professional appraiser fee which provides your lender with an estimate of the home's true value.
• Closing or escrow fee: The cost of the title company, escrow company or attorney assisting in the closing.
• Escrow account: It can include a deposit covering first two months of property taxes and home insurance payments.
• Private Mortgage Insurance or PMI: This is an additional cost of borrowing money, typically required for borrowers who make a down payment of less than 20%.
• Prepaid interest: This is the prepayment of interest that will accrue from the day of closing until the date of the first mortgage payment.
• Title fees: This covers the cost of a title search by a title company to look for possible legal claims on your property.

Asking questions early in the loan process will prevent surprises come closing time on your new home. Reach out to one of our Mortgage Loan Officers for more information. Want to know more or have a weekly financial wellness tip sent to you? Sign up below or, contact your local Mid Minnesota Federal Credit Union Office. Sign Up for a Weekly Financial Wellness Tip Mid Minnesota Federal Credit Union is federally insured by the NCUA and we are an equal housing lender.