There are numerous closing cost fees for your loan application. Make sure you know what all these are before signing your mortgage loan contract, as these fees can vary significantly between lenders. The lender is required to provide you by federal law a HUD-1 Settlement Statement, that will list out all the fees and associated costs. Let us have a look at what types of fees you could be paying for.
An application fee is charged by some lenders just to submit a loan application. This is to offset the cost of processing your application, a loan broker cannot charge you this fee. There are also additional fees to what is called a loan originator fee, this is to pay for the entity that originated your loan application and bought that business to your lender. Your lender will access your credit report to determine your credit status and they will also charge you the cost for doing this.
Local fees that are charged by your local government for transferring deeds and recording real estate transactions will also be passed onto you. A search of the title to verify that the seller actually owns the house is also undertaken and the cost is passed onto you to pay. Your lender will have costs in reviewing the home itself that you want to buy, they will charge you a appraisal fee as they will engage professional appraisers to value the home, possibly so a survey to check that the boundaries are correct with an associated fee to be paid and they will also charge you a flood determination fee as they check to see if the home is in a flood zone and if it is provide you with a flood certificate which you pay for as well. With all of this activity and paperwork there will be a courier fee to cover these costs.
When all of this is completed and you have signed the loan contract a final fee grab is done by what is called a closing cost. This pays the lawyers or any other legal costs. Well that is about all the fees, your bank account will be exhausted from all of the activity of outward funds transfers.
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