Mortgage Loans -  Closing Costs

Mortgage Loan Origination fee
This amount covers the administrative costs in the creation and processing of the loan. The loan can be departure tax as a percentage of the amount of the mortgage.
Items (optional) One option is for the buyer to pay points to lower the interest rate at which the loan will be repaid. Each point is equal to 1 percent of the amount of the mortgage. For example, on a $ 150000 loan, 1 point equals $ 1500.

Appraisal fees
The tax assessed for the house may be incorporated into the cost of closing or payment may be required by the lender when the loan application is submitted.

Credit Report
The lender uses a credit report to determine the creditworthiness of loan applicants. This fee is often paid when the loan application is submitted.

Interest Payments
Typically, the buyer is required to pay interest on the mortgage to cover the period between the closing date and the date on which the first mortgage payment period begins. For example: If the closure is May 15. Your first monthly payment interest begins to accrue, on 1 June, with your first mortgage payment due July 1. Upon closing an interest payment covering the exercise period between May 15 and May 31 may be required.

Escrow Account
At the close of a payment may be required to fund the escrow account if the lender pays the insurance, property taxes and / or other expenses in the escrow account.


Insurance Closing Costs

Homeowner's Insurance
This insurance covers replacement costs for damages caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage.

Flood or Quake Insurance
Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). An appraiser, inspector, or your realtor can let you know if a property resides in a hazard zone.

Private Mortgage Insurance (PMI)
Insurance required for conventional mortgage loans when the borrower's down payment on the house is less than 20 percent of the loan value.

Title Insurance
This policy protects both the buyer and lender by insuring a clear chain of title. (In other words, it insures that that the person who sells the house has the legal right to do so.)