What does a facility fee cover?
A facility fee is paid annually or monthly to a bank facilitating the loan or borrowed amount. The fee is also called the commitment fee, and it covers a small percentage of the loan, usually between 3-6%. The fee, interestingly, does not consider the interest on the borrowed amount.
a facility fee, the time where the balance remains zero is covered. with A facility is a revolving line of credit or term loan that only ends when it is entirely paid and closed. Even if the credit facility stays at zero, the facility fee is still due. This particular fee is only paid once each year, if chosen annually, from the borrower to the lender or bank in charge of the home loan. This fee covers a significant amount. For example, with a facility fee, the time where the balance remains zero is covered.
The annual credit facility fee is a small percentage that guarantees the borrower will pay the remaining cost or balance of the loan. Keep in mind, though, that the borrower is still responsible for other costs and fees like an application fee. Facility fees are not covered in the application or other banking fees.
Facility Fee Coverage Conclusion
Overall, a facility fee covers security to the company that facilitates the loan or borrowed amount. Technically, a facility is not a loan, but both are represented by a line of credit. Not sure how much you can borrow? Mortgage House has a free mortgage borrowing calculator online for your convenience.