The costs and fees listed below are the charges you are most likely to
encounter when obtaining a home mortgage. These amounts may vary
greatly between lenders and in different areas, so the following ranges
are only estimates. Your actual closing costs and fees may be
greater or less than those shown below. In addition, you may be
charged for certain other types of closing costs.
|Application Fee ||$100 to $300|
|Appraisal Fee ||$150 to $400|
|Survey Costs ||$125 to $300|
|Homeowner's Hazard Insurance ||$300 to $600|
|Attorney Review Fees ||$100 to $200|
|Title Search and Title Insurance||$450 to $600|
|Home Inspection Fees ||$200 to $400|
|Loan Origination Fees ||1% of loan|
|Mortgage Insurance ||0.5% to 1.0%|
|Points ||1% to 3%|
Some of the costs and fees listed above, such as survey costs,
are self-explanatory, but we will briefly describe some of these
charges which are less familiar to many people.
- An Application Fee is imposed by your lender to cover the initial
costs of processing your loan request and checking your credit report.
- The Appraisal Fee pays for a documented appraisal, which is
an estimate or opinion of the property value.
- Title Search and Title Insurance are required to cover the cost of
examining the public record to confirm ownership of the
real estate. It also covers the cost of an insurance policy which
insures the policy holder in a specific amount for loss caused by
discrepancies in the real estate title.
- Attorney Review Fees are imposed by the lender for fees paid to
the lawyer or company which represents the lender at the closing.
Settlements are conducted by lending institutions, title insurance
companies, escrow companies, real estate brokers, and attorneys
for the buyer and seller. In most cases, the person conducting
the settlement is serving the lender. You may also be required
to pay for other legal services relating to your loan.
Furthermore, you may wish to retain your own attorney to represent
you at all stages of the transaction including settlement.
- Loan Origination Fees are charged for the lenders' work
in evaluating and preparing your mortgage loan.
- Points are prepaid finance charges imposed by the lender at closing
to increase the lender's yield beyond the stated interest rate on the
mortgage note. One point equals one percent of the loan
amount. For instance, one point on an $80,000 loan would be
$800. The number of points a lender charges often depends on
- Mortgage Insurance is required for certain types of loans.
For instance, you may be charged a fee for a VA loan guarantee,
FHA mortgage insurance, or private mortgage insurance.
Sample fees, insurance premiums, and other costs associated with a mortgage loan.
A well informed consumer is usually better able to make sound financial
choices. If you are considering buying or refinancing a home, we
trust you have found this overview helpful. However, this article
is no substitute for professional advice. Do consult with
real estate agents, attorneys, mortgage lenders and other financial
advisors whom you trust before you commit to a specific home mortgage.
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