How your mortgage fees can change

Getting a mortgage can be a costly endeavor if you don’t plan accordingly. Deadlines, qualifying, and paperwork are some of the things you’re going to be dealing with over the course of your escrow. Here’s what you need to know regarding loan costs…

Fees can change in part for a slew of reasons, but for our purposes here are the main reasons:

Timing is critical-when your lender asks for bank statements, pay stubs or any other form of supporting documentation for your mortgage application, get this documentation in quickly i.e. 24-48 hours. Failure to do so can result in having to take a rate lock extension. An interest rate lock is good for a certain period of time typically for 30 days or in some cases as long as 45 days. The money is set for a specific period of time. Essentially, a rate lock is putting a hold on the money you’re looking to borrow for a certain period of time under certain terms i.e. a certain interest rate under a certain program.

As the market moves the value of this rate lock to the end investor can be more or less valuable at the end of your escrow. For example let’s say you lock in a 30 year fixed rate mortgage at 3.625% at no points on $500,000 loan. At the end of 30 days because of the delay in the process (more on this in a moment) it is determined you’ll need another 10 days to close escrow. Meanwhile, interest rates changed and while you are locked at 3.625, rates are now at 3.875% on a 30 year fixed on that same $500,000 loan. As rates rose since your lock in date the value of your loan is less desirable to the end investor as it would be more financially advantageous for them to lock in a new loan with a higher interest rate. The lender would either re-lock your loan at worst-case market pricing or would allow you to extend your loan driving your loan fees higher.

External delays-external factors can also cause delays in your escrow. These external factors may include other parties not performing such as the seller of the property failing to quickly sign required seller docs or home appraisal delays. These are delays though not your fault can still cause you to have to pay more money on extending your interest rate lock. Best to plan accordingly. This means when buying a house ordering appraisal upfront as soon as possible in order mitigate delays down the line. When refinancing this means ordering the appraisal up front at loan application or planning for a 45 day escrow time frame.

Appraisal Fee Changes-residential real estate appraisers have total and complete authority on the value of your property. Most mortgage companies have a set standard appraisal fee approximately $500. Despite most mortgage companies having a set standard appraisal fee the appraiser has the right to change what they want to charge to perform the appraisal. For example if they had a heavy workload, they require more money to complete the order or deny the order resulting in the lender having to find a new appraiser. If you’re under the gun for an escrow you may have to bite the bullet and pay the additional fee to have the appraisal done quickly or within the time frame stated in your purchase contract.

Miscellaneous items- Other factors that change your loan fees are appraisals not coming in at the desired value changing the loan-to-value on your loan subsequently changing fees and/or the rate you otherwise were expecting based on a different valuation of your home. Additionally, if the property is missing a CO2 detector which in some states is law like California the appraiser must to go back out to the property to sign off on the appraisal resulting in an additional charge.

The best way to mitigate additional fees that can come up in the loan process is clear responsive communication with your lender. It is up to your lender to make sure they are setting right expectations with you by communicating not what you want to hear, but what you need to hear.

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RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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