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LOAN FEES VS. CLOSING COSTS

When purchasing or refinancing a loan, you will have two types of costs involved with the transaction; Loan Fees and Closing Costs.

Loan Fees
Loan Fees are those fees associated with obtaining the mortgage and are paid to the lender as a cost of providing the mortgage. These costs include, but are not limited to, the following:

• Processing Fee. Normally paid at application and represents the lender's cost to process the loan. Cost can range from $50 - $100 and is paid at application or included in the application fee.
• Credit Report. The cost charged to the bank by the service providing credit report services. Additional credit report fees apply for non-married co-borrowers. Initial credit report costs ranges from $50-$60. Additional costs range from $40-$55. Credit report fees are paid at application.
• Appraisal. The cost charged to the lender by a certified appraisal company providing the appraisal of your home. The cost of the appraisal is higher for multi-family homes and generally for homes valued in excess of $500,000. Single family appraisals range from $200 - $300 and multi-family appraisals range from $450-$550. Fee is normally paid at application.
• Flood Certification or Flood Tracking. The cost charged to the bank by the service which notifies the lender whether or not your home is located in a flood zone. Fee ranges from $15-$30 and is normally paid at application.
• Origination. Origination fees are normally charged by mortgage brokers, bankers or companies. This is pure commission on the loan and normally won't be disclosed to you unless you specifically ask. An Origination Fee is normally 1 pt. or 1% of the amount you are borrowing.
• Warehouse. Warehouse fees are normally charge by mortgage brokers, bankers, or companies which carry a line of credit with a larger bank or finance company. Warehouse fees are the finance charges the lender has to pay on the line of credit which are passed on to the borrower.
• Commitment Fee. Fee paid to the lender at the time of commitment. Normally charged in lieu of the attorney review or title review fee. Fee ranges from $100 to $300 and is paid at commitment (point at which bank notifies you of your approval).
• Tax Service Fee. Charged by lenders who require tax service; a service which informs the mortgage holder of any liens which apply to the home where the mortgage holder would take second position. Standard charge is $83 and is normally paid at closing.
• Doc Prep Fee. Fee to prepare the mortgage documentation. Fee can range from $50-$100 and is normally paid at closing.
• Attorney or Title Review Fee. Cost charged to the bank by the bank's attorney for work performed in connection with the mortgage. Fee ranges from $150-$300 and is normally paid towards closing.
• Rate Lock Fee (Refundable and Non-Refundable). Cost to lock the rate. For standard 60-75 day rate locks, this fee is normally refundable. For extended rate locks, always ask if the fee is refundable at closing.
• Pre-Paid PMI. If PMI is required on your loan, you are required to pre-pay some of this PMI at closing. The amount required may range from 2 to 14 months of your monthly premium, depending on the type of coverage the lender offers. Also check with the lender to determine if a portion of your closing pre-payment can be refunded when PMI is no longer required.

Always ask for a complete disclosure of all fees you are required to pay to the mortgage lender and get it in writing. If you don't ask, the lender may not fully disclose all fees required until after you submit the application and receive your Good Faith Estimate of Closing Costs. Chances are you will have already paid an application fee, and possibly a rate lock fee, which are not refunded if you withdraw your loan application. In addition, be aware of gimmicks. Some lenders may tell you that the application fee is refundable, but make sure to consider all the other fees you will have to pay.

Closing Fees
Closing fees are the fees you will pay as part of a standard closing. These fees should not be affected by the lender providing your mortgage. Always cover these costs with the attorney or title company representing your interests at the closing. Standard fees include, but are not limited to, the following:

• Attorney Costs. $600-$1,000
• Survey. $350-$400, if the most recent survey is less than 7-10 years old and no significant changes have been made to the property (additions, decks, sidewalks, driveways, fences, etc), check with the lender for requirements.
• Title Search. $150 - $250.
• Title Insurance. $500 to $2,000 or greater, based on amount borrowed.
• Home Inspection. $300-$400 for standard single family home.
• Termite Inspection. $75. Always required when purchasing a home; check with the mortgage lender when refinancing.
• Well and Septic. $250. Always required when purchasing a home; check with the mortgage lender when refinancing
• Underground Oil Tank. $400. Recommended if there is no insurance policy on the tank; discuss this issue with an attorney.
• Recording Fees. $100-$200, charged by county in which mortgage and deed is recorded.
• Overnight Mail. $75.
• Other Costs. Lead Paint , Asbestos and/or Radon Tests.