Loan-Related Closing Costs

Loan Origination Fees

These cover the administrative expenses in setting-up and processing the loan. The loan origination fees may include costs for loan processing, underwriting and document preparation for the closing.

Title Fees 

Fees charged by the title company for the title policy, settlement, copies, couriers, and other state required charges.  Survey fees to the survey company.

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  by a licensed appraiser is typically paid after the home has passed inspection, and all option periods have ended.   Possible re-inspection fee by the appraiser if the appraisal was "subject to" any repairs.

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.

Prepaid Interest Payment

Typically the buyer is required to pay interest on the mortgage loan to cover the prorated portion of the closing month.  Then interest accrues for a month, and the first actual mortgage payment is not due the first of the next month.

Escrow Account

At closing an initial deposit would be required to fund the escrow account, if the lender is paying home insurance, property taxes and/or other expenses out of an escrow account.