Broker’s Fees

This is a fee charged by a mortgage agent for their services. Of all fees, this is quite possibly the most egregious abuse of borrowers that we can think of. The reason is simple: The lender is already paying the broker for the business, so any additional fee charged to you is the equivalent of “double billing”. When an insurance company does it, it is considered a crime. Mortgage agents shouldn’t be allowed to get away with this tactic either.

Document processing Fees

There are multiple documents that must be prepared by the lender and/or your mortgage agent associated with obtaining a mortgage or refinance loan. These fees sometimes slip through your radar undetected, often because of how anxious the borrower is to get their loan processed. Fees for a mortgage are ever-present, but it’s imperative that you be aware of what each one is – and why it’s being charged. If you see this fee, question it.

Application fees

You might be surprised to know that you’re being charged for simply applying for a loan, but this one has gotten to be more and more common with the passage of time. While being charged for applying for a loan seems as ridiculous as paying for a glass of water in a restaurant, millions of Canadians have silently paid this fee without questioning it.

Retainer Fees

These fees are typically charged on commercial loans, but are increasingly appearing in residential loans as well. This fee is a way for the mortgage broker to pass along some – or all – of the costs associated with placing a difficult loan. Some borrowers have significant credit issues that make obtaining financing difficult, so some mortgage brokers expect additional compensation in these situations.

Loan origination fees

This is a fee commonly charged by the lender for originating your loan. The amount of the fee can vary considerably, so be sure you figure the cost into how much you’ll be paying in fees for refinancing a mortgage. A lower interest rate is worthless if these fees eat up the savings you see in terms of your interest rate.

Lender fees

Among the fees for purchase loans & refinancing are appraisal fees and a host of other fees. Some are legitimate; many aren’t. So pay close attention to what you’re being asked to pay.

Legal fees

There is a time and a place for legal fees. When it’s time to purchase a home or refinance your existing mortgage, an attorney can provide an invaluable service in registering your mortgage or paying the disbursements on a loan – ensuring that the proper parties receive loan funds. Expect this fee.

Mortgage Insurance fees

If you have a very high loan to value ratio – meaning that the amount of your loan will exceed 80% of the value of your home – mortgage insurance is required. Not to be confused with life insurance, CMHC or GE insurance is paid for by you, but the lender is the beneficiary. This is nothing more than loan insurance, which guarantees that your lender will be paid in the event that you default on your loan.

Appraisal fees

While nobody wants to pay for an appraisal, most lenders will require one be done prior to approving a refinance loan. Occasionally a mortgage broker or agent will come along offering to pay this expense for you. While this does happen, be extra cautious whenever you get this particular offer. In some cases, a mortgage broker is playing a game of hide and seek with fees. You may initially think the appraisal is being paid for on your behalf only to discover very late in the process that the mortgage broker is advancing the cost of the appraisal to you – and that you’ll pay for it at the closing table when your attention is elsewhere.