Loan-Related Closing Costs

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount. We never charge a Loan Origination Fee.

Points (optional)
An option for the borrower is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500. Points maybe tax deductible.  Contact your accountant.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Account
At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account. Not required for California transcations.

Title and Escrow

All loan transactions require an escrow and title insurance.  The escrow agent handles the funds from the buyer, seller and lender in a purchase transaction and the lender and borrower in a refinance transaction.  They make sure all existing loans are paid off and the funds are properly dispursed.  All transactions require title insurance.  In a purchase transaction, the new owner gets a title insurance policy to guarantee they have good title to the property and title insurance to quarantee to the lender there are no other liens on the property.  With a refinance, the borrower purchases title insurance for the lender.  Each state and county has different practices as to who pays for each type of insurance.  Contact us for an accurate estimate.