Closing Costs - Loan Fees

When you purchase a home utilizing a mortgage, there will be multiple cost for the lender to originate and process the loan. Here is a breakdown of the most common loan costs and fees in the State of Florida:

Loan-Related Loan Costs, Fees and Expenses

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 and include an administrative fee, lender fee, processing fee, underwriting fee, flood certification and prepaid interest.

Points (optional):

An option for the home buyer to pay points to lower or "buy-down" the interest rate at which the loan will be repaid. Each point equals a fractional percent of the mortgage amount. Please consult your loan officer for an exact breakdown of the buy-down percentage and cost.

Appraisal Fee:

The fee for having the house professionally appraised may be incorporated into the closing costs, or payment may be required by the lender upfront and at the time the loan application is submitted. Most lenders these days require the Buyer to pay the appraisal fee at the time of ordering, also known as POC (paid out of closing). Appraisal fees vary, but typically run between $400.00-$600.00

Credit Report:

The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is typically paid at the time of closing and part of your overall closing costs.

Interest Payment:

Typically, the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. 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 may be required. FYI - Mortgage interest is paid in arrears!

Escrow Account:

At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.