Home Loans And Fees

Application Fees

Application Fees

This charge will be absorbed into your home loan, but its still an additional cost that you should be aware of. Application fees that are charged are not an industry standard, so look for the application fee figure when it comes to different loans (and lenders also). While one application fee can be something as low as $250, for more specialised home loans, they can exceed the $1000 mark.

Monthly Administration Fees

In comparison to the amount you are taking out for your home loan, the monthly fees can be minimal; however, added up over the life of your loan or even just 12 months, the total can be quite astonishing.

These fees are often applicable to the more specific loans such as introductory rate home loans, fixed rate mortgages, portfolio loans, super fund home loans, etc. An instance where these fees may not be applied to your loan is when you take out the most basic of home loans available from your lender.

Early Exit Fees

In recent years with the emergence of many new home loan lenders and mortgage brokers, there has been a trend of refinancing. However, many home owners forget that there can often be hefty fees associated with leaving your current loan to go to a new one, especially if it is with a different lender.

In some cases, the exit fees can actually outweigh the savings of switching to the new loan. Therefore, while most home loans will have an exit fee attached to it (and this is quite normal), it is important to evaluate whether it is really worth paying the charges associated if you are refinancing.

When it comes to home loans, additional fees, on top of the interest rate being charged on the money you borrow, are very normal. Being aware of what you are charged and knowing the overall cost of the loan will allow you to budget and manage your money far better.

by: Ruth Carter

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