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Buyer Education Center

What Are The Charges Associated With A Mortgage?


There are always charges associated with obtaining a mortgage (whether direct, or built into the interest rate). It is important to know the breakdown of costs before you begin the process. The costs that we show you here are for the entire mortgage process, but will not include every single charge (your Realtor may charge fees that are not disclosed here).

The charges you will encounter come in two forms: 1) in the interest rate of the mortgage note, and 2) the direct charges to the consumer – most of which are detailed in a variety of documents that AAFMAA Mortgage Services will send to you well ahead of your closing. We say ‘most’ because your Realtor may impose charges that are not disclosed in this paperwork.

The interest rate is actually the most important number to examine. Why? It lasts, typically, for 30 years. Thirty years of payments at .25 percent higher interest rate costs the consumer $15,000 on a $200,000 mortgage loan over 30 years. Clearly, this is important. And this is where AAFMAA Mortgage Services is particularly competitive. While we may not be able to beat every single loan situation and every product in the market, we will try. Our number one goal is to be extremely competitive on rates.

The second set of charges (direct charges) are for title insurance, the closing attorney, appraiser, inspections and a number of other charges associated with the closing of the consumer’s loan. These charges are separate from escrows (taxes and homeowners’ insurance), which are not considered direct charges to the consumer since taxes and homeowners’ insurance occur as the consumer lives in their home (after the mortgage is consummated).

The aforementioned direct charges will vary by state, and even county. You can generally expect to pay around $3,000 for a $300,000 mortgage.

The direct charges are considered closing costs and are fully disclosed to the consumer at AAFMAA Mortgage Services well in advance of closing. We do not mark up any direct closing costs and do not charge the consumer anything upfront. The consumer will, shortly after completing a purchase and sales contract (or application), have to purchase an appraisal. The appraisal will range upwards of $400, and will be detailed for your specific home – larger square footage homes cost more, as do homes in urban areas or special property types.

When reading about the costs of mortgages, be aware that AAFMAA Mortgage Services will not publish rates to the general public. Too many companies falsely advertise rates that consumers may never get. We will customize your rate to your particular financial situation and you will receive a competitive rate.

Honesty, integrity, and trust are the tenants to which we ascribe. Call your AAFMAA Mortgage Services loan officer to get started.

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