inquire with a mortgage lender for a new home loan they usually
prepare a "Good Faith Estimate" of closing costs. Although
mortgage lenders are required to mail a copy to you within three
business days of application a smart consumer should always
request a copy faxed or emailed before submitting an application
since this estimate will provide you with a written verification
of the fess you were quoted by the lending specialist.
important to note that just because the lender is the one who
prepares the estimate not all closing costs are charged by the
lender. The lender is only preparing an estimate of the costs
you may incur when buying or refinancing and is not required to
list all potential costs nor does the lender know what all the
costs are actually going to be. The estimate is an educated
guess based on past experience. Some things will get left out.
Always anticipate the actual third party costs (such as title,
appraisal, recording fees) are going to be more than the
lenders, please do not look at the "total" cost. Only compare
the costs actually charged by each lender. Both lenders are
only estimating third party charges and some lenders may even
habitually underestimate just to convince consumers they are
Loan Origination Fee The loan
origination fee is often referred to as "points." One point is
equal to one percent of the mortgage loan. As a rule, if you are
willing to pay more in points, you will get a lower interest
Discount Points Any points in
addition to the loan origination fee are called "discount
Appraisal Fee Appraisal fees
vary depending on the state, type of property and home value.
Unique and more expensive homes usually have a higher appraisal
fee. Additionally, appraisal fees on VA and FHA loans are
higher than on conventional loans because they require the
appraiser to inspect items not strictly associated with value.
Credit Report As part of the
underwriting review, your mortgage lender is required to review
your credit history. The credit report fee can range from $7 to
$60 or higher depending upon the type of credit report required
by the lender.
Lenders Inspection Fee You
normally find this on new construction and is associated with
what is called a 442 inspection. Since the property is not
finished when the initial appraisal is completed, the 442
inspection verifies that construction is complete before you
close on your loan.
Mortgage Broker Fee Almost
75% of all mortgage loans are originated through mortgage
brokers and they will sometimes list your points in this area
instead of under Loan Origination Fee. They may also add in any
broker processing fees in this area. The purpose is so that you
clearly understand how much is being charged by the wholesale
lender and how much is charged by the broker. Wholesale lenders
offer lower costs/rates to mortgage brokers than you can obtain
directly, so you are not paying "extra" by going through a
Tax Service Fee Independent
service fee charged by the lender to monitor property tax
payments regardless of whether or not you escrow taxes in your
monthly payment or pay them separately throughout the year. This
fee usually runs between $70 and $100.
Flood Certification Fee Your
lender must determine whether or not your property is located in
a federally designated flood zone.