When navigating the mortgage process in Illinois, understanding the various fees associated with lenders is crucial for budgeting accurately. Below are some of the top mortgage lender fees you might encounter:
The application fee covers the costs associated with processing your mortgage application. This fee is typically non-refundable and can range from $300 to $500, depending on the lender.
The origination fee is charged by the lender for evaluating and preparing your mortgage loan. This fee is usually a percentage of the loan amount, often around 0.5% to 1%. For a $250,000 loan, this could mean an additional $1,250 to $2,500.
This fee covers the cost of reviewing your loan application and ensuring that it meets the lender's criteria. Underwriting fees typically range from $400 to $600, and it may be included in the origination fee.
Lenders will check your credit to determine your eligibility and interest rates. The credit report fee usually ranges from $30 to $50, and it's a necessary cost for all mortgage applications.
An appraisal is required to establish the fair market value of the property you wish to purchase. In Illinois, appraisal fees can vary but generally fall between $400 and $700.
Title search fees ensure that the property is free of any liens or claims. Title insurance protects the lender against any future disputes over ownership. The combined cost for these services can range from $500 to $1,500, depending on the property's value.
A survey assesses the property lines and boundaries. While not always required, some lenders may request one, which can typically cost between $300 and $500.
Prepaid interest is calculated based on the number of days until the first mortgage payment is due. This fee varies based on your loan amount and interest rate but is an important aspect of your closing costs to consider.
Most lenders require you to secure homeowners insurance before closing on the property. The cost of insurance varies widely based on the property's location and value, averaging around $800 to $1,500 annually in Illinois.
Local governments charge recording fees when the mortgage documents are filed with the county. These fees can range from $50 to $200, depending on the county.
Understanding these top mortgage lender fees in Illinois is essential for potential homeowners. By being aware of these costs upfront, you can plan your budget accordingly and avoid any surprises at closing. Always ask your lender for a detailed breakdown of all applicable fees to ensure you fully understand your financial obligations.
