Condo Living 101

Some Costs Involved When Securing A Mortgage

October 8, 2008 on 6:07 am | In More Information | Comments Off

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There are a number of direct and indirect costs included in obtaining a mortgage. Maybe not all of them are applicable in your situation but it is useful to know them.

• Appraisal Fee is shouldered by the borrower. The lender usually gets its appraiser to know the value of the security for mortgage purposes.
• Property Inspection Fee. Inspection is done to assure the borrower that he/she is buying a house in the condition he/she expects..
• Survey Fee. A survey is usually required so the lender knows the exact dimensions of the property to be used as security. This is also done so the lender knows if the building meets the requirements for set backs according to the law. A survey is normally required of older buildings. If you are buying a new or relatively new property, then you could request that the survey requirement be waived .
• Mortgage Insurance Fee is paid if and when required by the lender.
• Fire and Liability Insurance Premiums. Primary lenders require borrowers to have sufficient fire insurance to cover the amount of mortgage and that they be paid first. Secondary lenders have the same requirement except that they must be paid second, so on and so forth. The borrower must have ample replacement insurance and must indicate to the lender’s lawyer whether the lender will be paid first or second.
• Renovation, Repair and Redecoration Costs must be factored into the purchase price. Major repairs need a substantial amount of money, therefore the borrower can bargain for a lower price to cover the cost of repairs.