As the closing date approached, the administrative costs—often called —began to stack up, typically totaling 2% to 6% of the loan amount :
: The lender charged a fee to process and "underwrite" their mortgage application, often starting at 0.5% to 1% of the loan .
: They paid $300–$500 for a pro to crawl through the attic and check for leaks. This was an out-of-pocket cost paid directly to the inspector .
Before they could even finish the paperwork, Sarah and Mike had to open their wallets for early due diligence:
Meet Sarah and Mike. They just found their dream cottage for $400,000. They have their 20% down payment ready, but their lender just handed them a "Loan Estimate" that made them realize the sticker price was only the beginning.
: A title company charged about $300–$2,500 to search public records and ensure no one else could claim ownership of the home .
More than a Mortgage: Eight Surprising Costs of Buying a Home
Finally, at the closing table, Sarah and Mike had to "prepay" for certain future expenses: