I’ve had a lot of clients ask me if loan officers charge any up-front home loan fees, so I thought I’d write a blog post on the subject. No, you don’t pay any up-front fee to loan officers for their services. A loan officer’s commission is paid by the bank after they do your loan, at the closing of your home purchase. For instance, if you get pre-approved for a mortgage, but never buy a home, you don’t owe your loan officer anything.
How Home Loan Fees Work
A bank’s fees for doing the loan are wrapped into a buyer’s closing costs at the end of a home sale. These types of fees are part of every real estate transaction, and your loan officer will go over typical closing costs when they meet with you or speak to you over the phone.
A lot of people wonder this same question as it relates to a real estate agent’s commission in a real estate sale. A real estate agent’s services in representing a buyer are completely free. The seller pays the listing agent a fee for selling the property, and the listing agent splits this with the agent who brings the buyer to the sale.
Get Pre-Approved!
So given that lenders don’t charge any up front home loan fees, there’s really no downside to getting pre-approved as soon as possible as you start thinking of buying a home, even if your plans change, and you end up moving somewhere else. A pre-approval is just a free formality that gives you an idea of the size of loan you qualify for.
Are you thinking of buying a home in Northern Virginia and you’re trying to estimate your home loan fees and other closing costs? Call me at 703-462-0700 or email me at DarrenRobertsonHomes@gmail.com and I’ll go over typical closing costs in Virginia with you.