Loan Closing Costs

As your realtor, I can advise you on what should be included in your closing costs and what may be "junk fees". Always get a "Good Faith Estimate" when shopping for mortgages so I can help you avoid those junk fees.

As your realtor, I will also review your HUD settlement statement with you prior to closing.

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. There are other processing fees that are assigned by the mortgage companies. Find out what these are and get a written "Good Faith Estimate" when shopping for loans. 

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.  In most cases the lender will recheck your credit score a couple of days prior to the closing. Remember not to make any purchases for your new home until your loan closes. Also, do not make any big cash purchases. Using your credit cards and using up your cash reserves can change your qualifying for that loan at the quoted interest rate.

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 mortgage escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

Recommended lender:

Diversified Home Mortgage

Perry VanDerBeck, Senior Loan Officer and Consultant

813-695-8516