These are costs that are incurred to obtain your mortgage. They are paid to third parties for services provided in order to get your mortgage approved and closed.
- Origination Fee - This is a percentage of your mortgage amount and is typically required when obtaining a non-conforming loan as well as an FHA mortgage and occasionally a conventional mortgage.
- Discount Points - One discount point is equal to one percent of your mortgage amount and can be paid to lower your interest rate. Discount points are typically optional, but sometimes required, and are an additional cost to you. In most instances, discount points lower your mortgage interest rate by 1/4 of a percent.
- Appraisal Fee - An appraisal must be ordered for each mortgage application. The appraiser's job is to verify that the value of your new home supports the value that we are basing our lending upon.
- Credit Report - We often obtain a residential mortgage credit report that checks three repositories, for example, TRW, TransUnion, and EquiFax.
- Underwriting Fee - An underwriting fee is charged by the lender and/or broker and is the cost of analyzing your loan for approval. Underwriting can cost $350.00 - $450.00 per mortgage file.
- Tax Service Fee - This fee is charged for escrow account set-up, for the cost of obtaining quality control documents for your file, and it may include the cost of a flood certification. This typically costs $50.00 to $100.00.
- Closing Fee - A closing fee is paid to the Title Company for the responsibility of closing of your transaction. This includes: preparing deeds and affidavits, disbursing your funds, properly transferring title from sellers to buyers when you are purchasing a home, paying off your old mortgage when you refinance, and recording all of the pertinent documents from your closing with the county public records.