Adjustable Rate Mortgages (ARMs) can be an attractive option for borrowers seeking lower initial interest rates. However, it’s essential to understand the typical fees associated with these loans, especially in Oklahoma. This article outlines the common adjustable rate mortgage loan fees you may encounter in the Sooner State.
1. Origination Fee
Most lenders charge an origination fee, which covers the cost of processing your loan application. In Oklahoma, this fee typically ranges from 0.5% to 1% of the total loan amount. For example, if you take out a $200,000 loan, the origination fee could be between $1,000 and $2,000.
2. Application Fee
The application fee is another common charge and can vary significantly. In Oklahoma, this fee can range from $300 to $600. It is designed to cover the initial underwriting and processing work performed by the lender.
3. Appraisal Fee
Before approving a mortgage, lenders require a property appraisal to determine its market value. In Oklahoma, the average appraisal fee is between $300 and $500. This fee ensures the lender is investing in a property worth the loan amount.
4. Credit Report Fee
Most lenders will pull your credit report as part of the loan approval process, and you’ll typically see a credit report fee reflected in your closing costs. This fee can range from $30 to $50 in Oklahoma and is generally paid directly to the credit bureau.
5. Title Search and Title Insurance Fees
A title search fee must be paid to ensure there are no liens or claims against the property you’re buying. Title insurance protects both you and the lender from potential disputes. In Oklahoma, these fees can vary but usually fall between $700 and $1,500 depending on the property’s value.
6. Survey Fee
Some lenders may require a survey to establish property boundaries. In Oklahoma, survey fees can range from $300 to $600. This fee protects both the buyer and lender from boundary disputes.
7. Flood Certification Fee
To determine whether a property is in a flood zone, lenders may charge a flood certification fee, which typically ranges from $15 to $30. If the property is in a high-risk flood area, you may be required to purchase flood insurance.
8. Discount Points
Borrowers often have the option to pay discount points upfront to lower their interest rates. Each point is typically 1% of the loan amount. Depending on the lender and market conditions, you might see this as a significant cost factor, especially with ARMs which may have variable rates.
9. Closing Costs
Beyond the specific fees mentioned, adjustable rate mortgages may also involve general closing costs, which can amount to 2% to 5% of the total mortgage. This includes attorney fees, document preparation, and other administrative costs involved in closing the loan.
Understanding the typical adjustable rate mortgage loan fees in Oklahoma is crucial for potential homebuyers. By being aware of these fees, you can better prepare yourself financially and make informed decisions about your mortgage options. Always consult with your lender for an accurate breakdown of fees specific to your mortgage situation to avoid any surprises when closing on your home.
