sale or refinancing of property. These charges will vary widely from state to state
and lender to lender, but will likely include:
paid by a borrower to the lender in exchange for a lower interest rate. Each point equals
1% of the loan amount.
Mortgage Application Fees
— Charged by the lender to cover the costs of processing a loan application. It's
sometimes paid up front at time of application; otherwise, it's included in the
Appraisal Fees —
The cost of paying a professional to assess the fair market value of the property. Usually
required as a condition of the loan.
Inspection Fees —
The fees charged for home, pest and other inspections. Lenders sometimes require inspections
to verify that the property is in good condition and will retain its collateral value.
Survey Fee —
charge for confirming the lot size and shape and to check for any encroachments.
Title Search Fee
— Paid to Chicago Title to verify that the home's title is "in the clear", (i.e. that there are no liens or outstanding claims on the property).
Title Insurance Premium
— The lender's policy covers only the lender and is required in
most cases. A buyer's policy is optional but highly recommended, and is usually very
affordable if purchased at the same time as the lender's policy.
Recording Fees —
Charged by the local register of deeds to make the transfer of property a matter of
Pre-paid Property Insurance
— The first full year's property insurance premium, paid in advance, directly to
the homeowners insurance company.
Pro-rata Property Taxes
— An adjustment to ensure that both the seller and the buyer pay their share of
the annual property tax, proportionate to the percentage of the year that each has ownership
of the property.
Pro-rata Interest —
An adjustment to cover the interest on the loan for the number of days until the first
payment is due.