Mortgage Fees

• When someone goes to a bank to get a mortgage, he will have to provide a lot of information and likely pay a lot of fees. There are credit report fees, property assessment fees and dozens of other fees that can quickly add up. As a way to make mortgages look more attractive to customers who are put off by the sheet number and cost of fees, some banks offer no-fee mortgages whereby all of the necessary tests, such as credit reports and property assessment, are performed at no cost to the borrower.
  
  

Interest Rate

• While a no-fee mortgage might sound like a great deal, commercial banks aren't going to give away money out of the goodness of their corporate hearts. What they are doing with a no-fee mortgage is biding their time. No-fee mortgages charge higher interest. Even a quarter of a percent of interest can make the bank up to $1,200 by the end of a 30-year loan. So, while the bank may have lost $500 on the fees, it has made $700 extra off the interest.
  
  

Fine Print

• A bank looks at mortgages in terms of the big picture, and anyone who gets a mortgage needs to do the same thing. Perhaps you're saving on some fees and that's convinced you that the bank is looking out for you. Maybe that's the case, but it's always a good idea to compare the loans and find out where the money you're supposedly saving has gone. Check the interest rates, the fees and the principle balance required on any mortgage. Spend some time working out the math in order to find out what the best deal really is.