Home equity loan closing costs & fees

If you've found a home equity loan that works for you, congratulations! Now, before you apply, do you know what the total cost of taking out the loan will be? Depending on the lender, you may need to pay expenses like appraisal, origination, and title search fees. 

"The expertise of licensed appraisers, attorneys, title agents, and other support staff could be needed during this time," says Rob Cook, Vice President, DHL Marketing for Discover® Home Loans. 

This is one of the reasons why home equity loans may carry closing costs and other fees. 

Below, find out what you may need to pay when obtaining a home equity loan.

Understanding closing costs

Home equity loan closing costs can vary. Some lenders may roll these costs into the loan balance or require you to pay them upfront at your loan closing.

Here are some common closing costs you should know about

Appraisal fee

An appraisal determines your home's current market value. The cost of an appraisal can vary depending on factors such as your property type, location, and the kind of appraisal your lender requires.

Origination fee

Some lenders charge a fee to process your home equity loan, also known as an origination fee. This may be a flat fee or a percentage of your loan amount. You may also need to pay a separate loan application fee.

Document preparation fees

Your lender may charge a fee for preparing documents related to your loan. This may involve a lawyer reviewing paperwork and/or a notary verifying signatures. 

Credit report fee

Lenders typically check your credit report when reviewing your application, and this process often incurs a fee. Looking at your credit may help them determine if you qualify for a home equity loan.

Title search fee

A title search reveals information about your property, such as ownership rights and any outstanding liens or taxes owed. You may have to pay a fee for this search.

Closing thoughts: Comparing lenders for your home equity loan