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Home Mortgage Closing Costs
Loan Related Closing Costs
Loan Origination Fee
The Loan Origination fee covers the administrative expenses for setting-up and processing the mortgage loan. The loan origination fee typically will be a percentage of the mortgage amount.
Points (optional)
As an option for home buyers to lower their interest rate at which the loan will be repaid, is to pay points. On average each point equals 1 percent of the mortgage amount. For example: on a $350,000 loan, 1 point would equal $3,500.
Appraisal Fee
The appraisal fee for the houses appraisal may be incorporated into the closing costs of the mortgage loan or paid to the lender at the time the mortgage loan application is submitted.
Credit Report
The credit report is used by the lender to evaluate the creditworthiness of the loan applicant. This fee covers the costs of obtaining the credit report and is often paid up front when the loan application is submitted.
Interest Payment
It is the homebuyer who is responsible for paying their interest on the mortgage loan for the time between the closing date of escrow and the date the mortgage payment period begins. For example: Escrow closed on Feburary 15. The mortgage payment period begins on March 1 with the mortgage payment due on April 1.begins to accrue interest on June 1 with your first mortgage payment due July 1. At close of escrow the home buyer will be required to pay money to cover the interest which will accrue between Feburary 15 and Feburary 28.
Escrow Account
The escrow account is where all the funds and documents pertaining to the purchase of the home are held. The home buyer will put their deposit into the escrow account. The lender will deposit the funds for the loan into the escrow account. The escrow holder will pay out of this account monies to cover; agent or brokers commissions, any loans or liens held against the property, real estate taxes the remaining balance will be paid out to the seller. The fees for the escrow service is normally paid by the home buyer.