What services does the bank provide together with a mortgage?
Have you decided to finance your new housing with a mortgage and have you already acquired one? Congratulations! Although, add up all the fees and what do you have to pay for. It will surely not be only the installments.
First basic: administration of a mortgage account
The major part of the amount that you will be paying is the installment but also there are other costs that can add up. First it is important to expect with administration of a mortgage account. That is an account at which the debt will be redeemed and therefore it will stay in a deficit.
Of course the mind boggles at this. This fee also wins a prize for the most absurd bank fee as you pay considerable amounts every month. Thanks to criticism some of the banks do not charge for this anymore.
Second cost: account with the same banking institute
You do not send the mortgage installments to the mortgage account yourself. The bank charges it on its own behalf. For this purpose it is usually necessary to have an account with the same banking institute that provides you with the mortgage. In case you do not want to lose your previous bank account, you have to run and pay for both of them.
Third cost: life and credit insurance
The banks often ensure the repayment of the loan in case of your death by an insurance. In that case insurance company pays for the rest of the loan and your heirs obtain the property without any debts.
In some cases this insurance is not obligatory but the bank manipulates you with promises of lower interest rate. You can pay the insurance monthly (capital life insurance), quarterly or once a year. Usually the bank makes you to sign contract with an institution it is somehow associated with.
Fourth cost: property insurance
Property with a lien and a mortgage you pay has to be insured for case of natural disaster. Usually it is sufficient if you have the property insured for the amount of the mortgage which is usually less than the whole price of the property. Then it is only up to you what kind of insurance you choose and how much you would pay.