If you want to travel, make home improvements, or pay for college, among other expenses, you may be thinking about tapping into your home’s equity to do that. But home equity loans aren’t always a good choice for every situation. One of the reasons for that is the closing costs, which some people may not realize will be an expense for their loan.
There are Closing Costs for a Home Equity Loan
Just like a standard, first mortgage, there are closing costs for a home equity loan, as well. You can generally expect the fees charged by your lender to be between two and five percent of the total loan amount. Asking about the fees in advance, and understanding the documents presented to you to close on your home equity loan, are extremely important. Here’s what you need to know about common and expected closing costs, if you choose to take out equity from your Columbia SC home.
What Kinds of Fees Will You Have to Pay?
Fees can vary, but there are some that are most often seen. Among the common fees for a home equity loan are:
- Appraisal fee
- Title search fee
- Credit report fee
- Origination fee
- Notary fee
- Document prep fee
- Attorney fee
Not every bank or credit union charges all these fees, and some places waive some or all the fees for home equity loans. Keep in mind that some lenders also add fees into the loan, so they aren’t paid up front, or they add the fees back on if you don’t keep the loan for a certain length of time. Finding out the answers to all those questions is important before proceeding.
Ready to learn more? Contact Palmetto Citizens Federal Credit Union today and get your home equity loan questions answered.