QandAs: Loans

What are some possible fees associated with a Home Equity Loan?

Answer:
When you take out a home equity loan, you are

literally taking out a second mortgage on your home. The fees you will be required to pay when obtaining a home equity loan are very similar to those you paid when getting your first mortgage.

The process of closing on a home equity loan is very similar to that of closing on a first mortgage. Typical closing costs include: title search fee, title insurance premium, recording fees, legal charges, document preparation and filing expenses, property appraisal charges, and other related expenses. Depending on your situation, you may choose to pay these out of pocket, or you may specific that a portion of the proceeds of your second mortgage loan go to pay these fees.

As with any home loan, there are also interest expenses associated with a home equity loan. The interest rate you pay will depend on market conditions at the time of financing and the terms to which you and the lender agreed upon when the loan was initially approved.


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