Preliminary fees are one of the additional costs that the customer has to face when requesting a loan or a loan from a credit institution. Usually, it is believed that the cost of a loan is made up exclusively of the interest rate, expressed as a percentage of the loaned capital: actually the interest, expressed in the form of a TAN (nominal annual rate) is the main cost item, but we must also remember other expenses necessary for the loan. These include, precisely, the costs of the preliminary investigation.
What are the preliminary investigation fees?
This is a set of initial expenses that the bank faces when the credit is opened. As a result, the institution will then download these costs to the applicant. This operation occurs both in the case of loans and mortgages. However, mortgages require quite important expenses of this kind.
The preliminary investigation costs for the opening of a mortgage concern first of all the evaluation of the documentation presented by the applicant, such as the documents that attest to the economic situation of the borrower and those that instead of describing the status of the property to be purchased. In particular, the analysis of the solvency of the potential customer is fundamental in the evaluation of the bank on whether to grant the loan or not. Furthermore, another expense item is the payment of an expert who visits the property and evaluates it on behalf of the bank. Other costs that sometimes fall within this group are notary fees and mandatory policies (though these items often represent separate expenses).
Preliminary investigation costs can weigh 1% of the loaned capital
Banks can request immediate payment, charging the amount on the first installment. Otherwise, you can agree to spread them over several installments, if not over the entire duration of the loan. For this reason it is important to consider the APR, annual effective rate, in the evaluation of the convenience of a mortgage: this rate sums up the other expenses, such as the preliminary ones (but notarial ones, though).
The preliminary investigation costs are therefore a cost item that should not be underestimated: it is important to check the amount on the amortization plan that will be proposed by the bank before the contract is signed.