If you have obtained a mortgage in the past or are currently in the process of obtaining a loan, then you are familiar with a down payment. The majority of mortgage loans require a downpayment but this is not the only expense you will face when getting a mortgage. The good news is that lenders are required now to disclose all the additional costs.
The first unexpected costs come in the form of lender fees. There are a lot of costs associated with processing a loan such as pulling your credit and flood determination and tracking your property insurance and taxes.
In order to cover these costs plus the manpower to do them, you will be charged things like a loan origination, processing fee, an underwriting fee, documentation fee, credit report, flood certificate, and tax tracking. Lenders by law are not able to charge over 3% of your total loan amount for the above fees.
Lenders do need help and will source out to get the loan process completed. For example, an appraisal is required for a mortgage, so an appraiser has to be hired. A title company or an attorney will have to be hired to make sure the title is clear and will also need to be the settlement agent at closing.