Key facts
- Many borrowers lack clarity on mortgage-related fees, leading to confusion and stress.
- 53% of borrowers fully understood application and document fees, while 9% did not.
- 50% of borrowers fully understood private mortgage insurance (PMI) fees, while 12% did not.
- 47% of borrowers fully understood lender origination fees, while 13% did not.
- Lenders can build trust and reduce uncertainty by providing proactive fee education and transparent communication.
In the competitive mortgage market, lenders are seeking ways to differentiate themselves and build stronger borrower relationships. A key challenge identified in recent reports is a lack of borrower understanding regarding mortgage-related fees, which can cause confusion and frustration throughout the lending journey.
The 2026 ServiceLink Loan Officer Report, surveying 507 loan officers, and the 2026 ServiceLink State of Homebuying Report, surveying 1,554 recent homebuyers, highlighted this deficiency. Borrowers expressed a desire for clearer explanations of fees, interest rates, and terms upfront.
While borrowers generally understood fees like taxes, realtor, and appraisal costs, comprehension was lower for less visible fees. For instance, only 53% of borrowers reported fully understanding application and document fees, with 9% admitting they did not understand them at all. Similarly, 50% fully understood private mortgage insurance (PMI) fees, while 12% did not. Lender origination fees also presented a challenge, with only 47% of borrowers fully understanding them.
Experts suggest that lenders can gain a competitive advantage by investing in proactive mortgage fee education and transparent communication. This approach can help eliminate uncertainty, build trust, and ensure borrowers feel confident approaching closing.