When you buy a home loan, there are many ancillary costs to pay including the fees . We explain in this article what they correspond to, the settlement period and how to negotiate.
What are the fees for a mortgage?
The argument of banking institutions
For banks, the fees are a form of remuneration. During a mortgage simulation, a file must be created and presented to several banks. These loan agencies will study and analyze with precision all the elements of your file in order to detect relevant information and guide actions.
The remuneration of the bank takes into account a study department and the constitution of the file of a borrower, these expenses finance the treatment of a file. On average, these fees can range from 0.4% to 1.5% of the amount borrowed, on average between 500 and 1500 euros, prices may vary from one case to another.
It should be noted that the application fee is included in the Annual Total Effective Rate (APR), it is a ratio of the total price of the financing granted to you by the bank. If your home loan is signed, the bank is obliged to provide it to you.
The delay of payment of the expenses of file
The processing fees are important income for banks, they pay the experts who have studied your mortgage application.
Some loans are automatically exempt from fees. This is the case when you subscribe to a Zero Rate Loan, in this case, the fees do not apply.
If your loan application is refused, the booking fees should not be charged even if your application has been the subject of a study with a bank advisor.
Your first immo loan deadline is the opportunity to pay back your application fees. The personal contribution also makes it possible to pay these expenses, in any case, you have to see that with the lending bank.
Negotiate fees, is it possible?
Before negotiating fees, you can know the amount through the tariff guides available in the agency or on the internet.
Banks consider that the fees do not have a considerable weight compared to:
- warranty fees
- price of a loan insurance
- mortgage credit rate
Before any negotiation, it is important for the borrower to put several banks in competition in order to obtain the most attractive borrowing conditions.
Depending on the profile of the borrower, banks will position themselves more easily to make a commercial gesture on the fees. Moreover, in the event of strong competition and that a bank wishes to keep a file, it is quite able to offer the expenses of file.
Personal contribution is a key element that demonstrates to the bank your ability to save. If it detects this seriousness, the bank will be able to make an effort on the amount of the expenses especially if in return you place a part of your savings on their books.
Real estate brokers fees
If you want to go through a mortgage broker to obtain attractive financing conditions, know that helps you and accompanies you to find the least expensive financing solution.