There are a number of fees associated with a mortgage. Some of these petty fees can add up so pay attention. You will have to pay for a title fee, courier fee and credit report. There will be a closing fee, paid either to a title company or an attorney, which compensates that party for completing and filing all of the appropriate paperwork. You will also have to buy title insurance. This insures the bank in case there is a problem with the title, such as a mechanic's lien, that means the bank cannot take the house back in case you stop paying your mortgage. Keep in mind, the policy is only for the bank; if you want title insurance also (protecting your investment) you need to buy an additional policy.
You will also have to pay some sort of "origination fee." Sometimes, these are called by other names, but they all amount to the same thing: profit for the lender. The origination can be based on "points" or a fixed amount. Points for origination are a percentage of the mortgage's value. For example, a half-point origination on a $150,000 mortgage is $750 in fees. Don't confuse these origination fees as the points normally shown on mortgage ads in the paper. Paying points on the mortgage reduces your interest rate, as you are essentially prepaying part of the interest. Paying points lowers your monthly payment, which can be helpful if you have saved properly to pay for the fees and down-payment.
If at all possible, you want to put 20% down on your house. This exempts you from PMI, or private mortgage insurance. PMI is a fee you pay that again insures the bank in case you stop paying, or default. It helps ensure that the bank will not lose money if they repossess the house and sell it at auction.
Many of these fees are fixed and non-negotiable. However, you can save some money by trying to negotiate certain bank charges, such as the credit report, courier fee, etc. You can also find your own title insurance and title company (or closing attorney); the mortgage company is not particularly inclined to find the best price since you are paying the fees anyway. It's a little extra work, and may save you a few hundred dollars, so you’ll have to decide if the effort is worth the time.
One last note on fees: your mortgage company would love to roll your fees into your mortgage. This sounds great to you, as it lowers the amount of cash you have to pay when you sign for the mortgage. Avoid this like the plague. If you put all of these costs into the mortgage, you will be paying interest on this amount for 15 or 30 years. The mortgage company will emphasize that it only raises your monthly payment by a few dollars, but they don't point out that you will pay thousands more in interest over the course of the loan.
While there are a number of mortgage options, for most of you the best option is a 15-year or 30-year fixed mortgage. Rates won't get much lower than they are today, so you are getting a good deal. While some markets may make it too difficult to get a decent house on a 15-year mortgage, if you can survive with the payments and house, you are better off with the 15-year mortgage. As you save for your house, remember to have a 20% down payment to avoid PMI and remember to save extra for all the associated fees.
Happy house hunting!