Loan-Related Closing Costs
Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount. Normally, as a Broker, we do not have loan origination fees on our conventional and government loans.
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.
The fee for having the house appraised will be required by the lender at the time the appraisal is ordered. These fees vary from $450 to $550 on most properties in developments. If you are buying a property on larger lot or a jumbo loan amount, then the price will be higher.
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan closes. These fees run from $35 to $500, depending on whether we need to work on your credit to rescore information on your original report. This is why you need have a report run at the very beginning of the process.
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and the end of the month. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 will be required. Mortgage payments are paid in arrears, so that's why you are expected to make the payment on the 1st of the month - you have basically had 30 days to save up for the payment.
At closing, payment is required to fund the escrow account if the lender is paying your homeowners insurance, property taxes and/or other expenses (flood insurance) out of the escrow account. They usually collect 3 to 4 months of those payments at closing.
Title insurance is an insurance policy that protects you and the lender against any loss from any defects in ownership to the property. The lender requires you to pay for their policy. They do not require you to purchase a policy, but it is in your best interest to do so. When you write a contract, you can ask the seller to pay for your policy, which will be discounted based on the fact you are required to pay for the cost of the lenders policy. There are also riders to the policy depending on whether you are buying in a Planned Unit Development, survey, adjustable rate riders and other types of riders as well, depending on the type of property you are purchasing. They also do a municipal lien search to make sure there are no local county or city liens on the property. You can search for title insurance costs in Florida to see the costs for a specific purchase price.
There are 3 types of Documentary Stamps. Documentary Stamps on the Deed, and usually the seller will pay for these. They are .007% of the purchase price. There are also City and County Stamps on the mortgage as well. These are .002% of the mortgage and .0035% respectfully.
I will be glad to give you a full list of closing costs. Usually it is 3% to 5% of the purchase price.
If you want more information, please email or call me at Sherry@SherryBitner.com or 941-504-1445.