Routing # 256078446
MORTGAGE KNOWLEDGE CENTER
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Mortgage Fees Explained: What You Need to Know
What you'll learn: Common mortgage fees and definitions you should know as a homebuyer.
EXPECTED READ TIME: 2 MINUTES
April 21, 2025
When it comes to the world of real estate, there are a lot of terms and definitions you are likely to come across throughout the homebuying journey. Keeping up with all the jargon can get complicated, especially in regards to the various types of mortgage fees you may need to pay.
But there is no need for concern. We have the ultimate list of mortgage fees and their definitions ready for your reference to help you be a more informed and empowered homebuyer .
Origination fee
A one-time, upfront fee charged by your lender in order to cover the behind-the-scenes work associated with processing your mortgage loan application. It covers administrative services and underwriting costs.
Appraisal fee
The appraisal fee covers the cost of hiring a certified appraiser who conducts a home appraisal and estimates the value of a property. Appraised value plays an important role in determining your loan-to-value (LTV) ratio and how much money a lender will allow you to borrow for the home’s purchase.
Tax service fee
A closing cost collected by lenders to ensure that new borrowers pay their property taxes on time.
Flood certification fee
Covers the cost of an inspection that determines if a property is located in a flood plain, or flood-prone area. Your lender uses the flood certification as a part of the mortgage approval process. In order to obtain a mortgage for a home in a flood-prone area, lenders will require that you get flood insurance.
Credit report fee
A fee charged by a lender for obtaining a copy of you credit report from credit bureaus in order to assess your creditworthiness and determine mortgage loan terms.
Escrow waiver
In the event that a borrower decides to manage their own property tax and homeowners insurance payments, rather than allowing a lender to handle them through an escrow account, then this one-time fee may be imposed by your lender.
Soft credit pull fee
A small fee charged by your lender to cover the cost of soft credit report pulls from the three major credit bureaus.
Mortgage insurance premium (MIP)
A fee required by the Federal Housing Administration (FHA) to qualify for FHA loans to protect lenders against losses if the borrower defaults, consisting of an upfront premium as well as an annual premium.
FHA up-front MIP fee
A requirement for all borrowers using Federal Housing Administration (FHA) loans, even if your down payment equals or exceeds 20%. It includes an upfront mortgage insurance premium (UFMIP) that is paid at closing, as well as an annual premium that is paid monthly.
Final inspection fee
The cost for a final review of a home and property by a home inspector. The final home inspection ensures that the house you are buying meets the standards and requirements set by your lender and the type of mortgage you are using to finance the purchase.
CondoTek
This mortgage fee is specific to homebuyers who are financing a condominium purchase through a lender. The one-time fee is charged by CondoTek, a technology and information firm.
Veterans Affairs (VA) funding fee
A one-time fee paid by eligible veterans, service members, or surviving spouses who are using a VA home loan to fund their home purchase.
SIMILAR ARTICLES
Mortgage Calculator - Know Your Options
Use PenFed's free mortgage calculator and determine your monthly payment, including principal and interest. Calculate conventional, VA, and jumbo home loans.
The Home Inspection Checklist for Buyers
Get the ultimate checklist for preparing to have your new home inspected prior to closing.
How to Speed up the Homebuying Process
The home buying process is complicated and can take time. Discover these home buying tips to find a home and close on time.
What Homebuyers Need to Know About Closing Costs
Learn who pays mortgage closing costs, how to estimate homebuyer cost to close, what fees make up closing costs, and ways to save.
Home Buying Steps
Mortgage Products
Disclosures
1Conventional Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.5 discount point, which equals 1.5 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
2FHA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.25 discount point, which equals 1.25 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 96.5%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
3VA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.375 discount point, which equals 1.375 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $450,000; loan-to-value ratio of 95%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of $995.
4Jumbo Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 0.75 discount point, which equals 0.75 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, non-conforming, fixed-rate loan. Loan amount of $1,009,000; loan-to-value ratio of 70%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Advance Period. During your Advance Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.
Routing #256078446
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