|
Check out all of our valuable resources, guides, and information as
you browse our site. If you would like to contribute or have
suggestions, please let us know!
Send an email to
info@loanshoppingtips.com
Today's Focus - Mortgage Closing Costs
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.
Points (optional)
An option for the home buyer 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.
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.
|