What Will It Cost?
To acquire a loan/mortgage on a property you will incur some non-refundable costs. These costs vary according to the loan company and the type of loan you choose. Some closing costs are negotiable, while some are set by law, depending on the loan.
I will be able to give you a list of “Estimated Closing Costs” according to your financing terms and loan type. The mortgage company will give you a “Good Faith Estimate” of your projected closing costs and buyer’s charges designated by the contract when you make a loan application.
Estimated Closing Costs:
Loan Origination Fee
This fee covers the lender’s administrative costs in processing the loan. This is a contract designated buyer’s charge. It is usually 1 percent of loan amount.
Often called “points,” a loan discount is a one time charge used to adjust the yield on the loan to what market conditions demand. Each “point” is equal to 1 percent of loan amount. This is a contract designated buyer’s charge.
This pays for a statement of property value for the lender, made by an independent appraiser. The charge is approximately $350-$450. THIS WILL BE COLLECTED AT THE TIME OF LOAN APPLICATION. This is a contract designated buyer’s charge.
This fee covers the cost of the credit report for the lender. It is a contract designated buyer’s charge of approximately $55-$75. THIS WILL BE COLLECTED AT THE TIME OF LOAN APPLICATION.
This fee covers the cost of a survey plat of the property. It is a contract option: a buyer’s or seller’s charge of approximately $350.
Owner’s Title Insurance Policy or
The title policy is issued by the Abstract Company to insure the clear title on the property. This is a contract option: abuyer’sseller’s charge. The fee is set by the Insurance Board and is based on the sales price.
Mortgagee Title Policy
The abstract company issues the Mortgagee’s Title Policy to the lender to cover losses due to problems not identified by the title search. This is a contract designated buyer’s charge of approximately $185.
Tax Service Fee
A lender fee to a service company to research and guarantee current status of taxes. It is a contract designated buyer’s charge (except on an FHA loan) of approximately $110-$200.
A lender fee to the investors to underwrite the loan. It is a contract designated buyer’s charge (except on an FHA loan) of approximately $150-$185.
For preparation of legal documents such as the Warranty Deed, Deed of Trust and Deed of Trust Note. This is charged to both buyers and sellers for legal papers drawn; approximately $175 each.
The abstract company will record all legal documents pertaining to the transaction. This is charged to both buyer and seller for recording documents, it varies according to the number of documents recorded; approximately $25 apiece.
This is a contract designated seller’s charge of approximately $30.
An abstract company charge for funding and disbursements. One half is charged to both buyer and seller of approximately $100.
This fee is charged to buyer (except on an FHA loan) of approximately $60-$100 each.
This is a lender requirement to verify whether or not the property is in the flood zone of approximately $35-$50.
These closing costs will vary depending on the loan company, type of loan, contract negotiations, and closing companies. Other miscellaneous lender charges could include an application, processing, settlement, or closing fee.
Closing costs are explained in the HUD guide to Settlement Costs that your loan company will provide.