What Fees are Associated with a Mortgage Loan?
There are a number of fees that a borrower may encounter when finalizing a mortgage loan for a real estate purchase or a refinance. We’ve compiled a list of fees that are part of the settlement for a mortgage loan. The fees can be separated into several categories: lender fees, escrow deposits, prepaid items, title fees, government recording and transfer fees, and additional settlement fees.
-Origination Charges – these are comprised of fees charge by the lender to process and underwrite the loan
-Discount Points – these are charges to the borrower for a particular loan interest rate or certain loan program
-Credit Report – fees charged to run a credit report for the borrower
–Appraisal fee – cost to have a licensed professional provide a market value of the property
-Flood Certification Fee – this is needed to determine if your property is located in a flood zone and if flood insurance is needed on the property
–Daily Interest Charges – interest is paid from date of settlement through the end of the same calendar month
–Homeowner’s Insurance – initial premium is paid upfront
–Mortgage Insurance (if necessary)
INITIAL ESCROW DEPOSITS
Most loans require the borrower to pay for property taxes and homeowner’s insurance on a monthly basis as part of the mortgage loan payment. When property taxes are due (typically twice a year), and homeowner’s insurance (annually) the lender will pay the bills out of the escrow funds.
-Settlement fee – Charged by the settlement company for preparation of closing documents and conducting the closing.
-Lender’s title insurance – cost of insurance covering the amount of the loan. This is required by the lender and covers title issues for the life of the loan.
-Owner’s title insurance – OPTIONAL coverage for the owner’s to protect against any tile claims on the property. This policy will protect the owner’s forever.
GOVERNMENT RECORDING AND TRANSFER FEES
–Government Recording Fee – fee charged by government to record the deed of trust
–Transfer Taxes – basically a sales tax that is paid to the local government as well as the state government
ADDITIONAL SETTLEMENT CHARGES
There can be several “additional” fees associated with a loan. Here are a few:
-HOA/Condo Transfer fees
If you have any questions about a loan, or would like clarification on any of these charges or fees associated with mortgage loans, please contact our preferred Lender, Keith Harris at Intercoastal Mortgage Company.
The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.