Costs Associated with Obtaining a Loan
Loan Origination Fee
This is what the lender charges as their cost of obtaining financing & administration for your loan typically based on a percentage of the loan amount
Pre-paids
Interest – From and including the day of closing through the end of the month.
Mortgage Insurance Premium
You may be required to pay your first year’s mortgage insurance premium, or a lump sum premium that covers the life of the loan.
Hazard Insurance Premium
Lenders usually require payment of one year’s hazard insurance/ homeowners insurance. To bind the coverage the premium may be paid in advance of closing.
Flood Insurance
Depending on the location of your home, flood insurance may be required & a year’s premium due in advance of closing.
Loan Discount / Points
Fee charged by lender to lower the interest rate on your loan. Each point is 1% of the mortgage amount.
Appraisal Fee
A licensed appraiser hired by the lender gives a market value of what the property your purchasing is worth.
Credit Report Fee
Lenders require a credit report to see if you are eligible for a loan & at what interest rate.
Title and closing charges
A title insurance policy protects you against potential losses that may occur after your house closes and you discover that someone else has ownership claim to the property.
Escrow Fee
Usually split between Buyer & seller, this is the fee paid to escrow for preparing documents, calculating closing figures & overseeing the execution of all the closing documents.
Title Document Preparation
The charge for preparing legal papers.
Recording Fees
Aid to the governmental body that records the official transfer of ownership.
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