Nobody likes surprises when it comes to fees so we want you to know about potential fees that could be charged to your account based on your individual situation.
First, here’s information about 4 common servicing fees and if possible, ways to avoid them.
A late fee is charged when we don’t receive your total loan payment by the due date or within a certain number of days after your due date (known as the grace period).
Late fees are calculated according to the terms of your loan and are a percentage of the outstanding payment due or they can be a flat fee. Your billing statement will include your payment due date along with the amount and date a late fee will be charged if the full payment isn’t received.
Our Automatic Payment Program can give you peace of mind to make sure your payments are made on time, every time. For monthly payments, you can pick the day of the month within your grace period and for biweekly payments you can choose the day of the week that works for you. Once you’re set up, as long as you have sufficient funds in your bank account when your payment is withdrawn, you can rest assured your payment will be made on time and you’ll avoid a late fee.
If you’re not ready to set up recurring automatic payments, you can also make a one-time electronic payment, pay by phone or mail a check. No matter which option you choose, be sure we receive your payment by your due date, or within your grace period, to avoid a late fee.
If your loan closed with an escrow account, you may need to have the account for the life of the loan depending on your loan type. If eligible, you can request to cancel the account for a fee.
The fee amount to cancel escrow can vary by state but is typically 0.25% of your unpaid principal balance, up to a maximum of $2,500. If you’d like to cancel the escrow account for homeowner’s insurance only, the fee is 0.125% of your unpaid principal balance, up to a maximum of $1,250.
An escrow account can help you easily manage your property taxes and/or insurance premiums. No need to worry about making a lump sum payment each year to pay your taxes and/or insurance. Instead, your regularly scheduled loan payment will include a portion that will be added to your escrow account. We’ll then receive your tax and/or insurance bills and use the money in your escrow account to pay them when they’re due.
To avoid an escrow cancellation fee, we can take care of your property tax and insurance bills on your behalf from the funds in your escrow account – just remember to make your full loan payment, including the escrow portion, when it’s due.
PMI is the insurance that protects the lender when customers default on their loan. PMI is required if you put less than 20% down when you get your loan.
If you meet certain requirements, PMI will be terminated automatically on the date when your loan amount compared to the original value of your home (LTV) is scheduled to reach 78%. (The original value is the lesser of the purchase price or appraised value at the time you got your loan.) If you don’t meet the requirements for termination by that date, PMI will terminate automatically once you meet the requirements.
Keep in mind, you may request PMI to be canceled sooner based on your property type and if you meet certain requirements.
In some cases, a property valuation, such as a Broker Price Option (BPO) or an appraisal, may be required before PMI can be canceled. You’ll be responsible for the cost of the valuation.
If you’d like to know if you’re eligible for PMI cancellation, give us a call at 800.234.6002 for more information.
If you’re looking for a possible option to reduce your loan payment, a recast may be right for you. A recast is when your outstanding principal balance is spread over the remaining term of your loan, ultimately lowering your payment.
Before a recast can be done, you must pay down your principal balance with a lump sum payment of at least $5,000 and pay a recast processing fee of $150.
There is no income or debt verification required so this is often a better option than a refinance. Plus, the $150 processing fee is a lot less expensive than refinance costs.
Additionally, your interest rate and number of years remaining on your loan will not change.
Most customers request a recast when they’ve received a large amount of money, like a bonus or inheritance, and want to lower their loan payment. Some customers request a recast if they’ve purchased a new home but haven’t sold their current one. Once the home is sold, they’ll use the proceeds to apply to their principal balance, then request to recast their loan.
If you think a recast is right for you, give us a call at 800.234.6002 for next steps.
There are other fees that may apply to you based on various servicing transactions and requests. To view a list of possible servicing fees Click here.
The amount you pay each month is a combination of mortgage principal, which reduces your balance and accumulated interest.
A 20% down payment has advantages like avoiding mortgage insurance, but there are other options. Learn more about a home down payments and how much is required.
Closing costs such as application processing and title fees are a normal part of the home-buying process. Learn about mortgage closing costs and how much you'll pay.
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Mortgages are offered and originated by Citizens Bank, N.A. (NMLS ID# 433960).
Disclaimer: The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.