With fees for everything from the appraisal to tax service, getting a mortgage is costly. Closing costs typically add up to thousands of dollars. The good news is that, each year, Bankrate conducts a survey of closing costs in all the states. See what the average fees are for your state, and let us help you save on closing costs when mortgage shopping.
2015 Mortgage Fees
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Terms to know
- Origination, broker, lender or originator
A fee charged to create a home loan. It's often a set percentage of the mortgage amount.
- Discount points
A fee in the form of mortgage interest paid upfront. In exchange for this fee, the lender reduces the interest rate. One point is equal to 1 percent of the loan amount.
A fee that is passed on to a company that renders an opinion about the real value of the home, independent of its listing or negotiated price. That value is then compared against what the borrower has agreed to pay.
- Credit report
A fee charged to order a history of your financial life. It includes details about your behavior as a bill payer, the amount of debt you owe, your available credit and any inquiries that companies make to obtain this information, such as your mortgage lender. A good credit report means better loan terms.
- Tax service
A fee to cover the cost of hiring a company to verify the amount of real estate taxes due and making sure they're paid.
- Flood certification
A fee that covers the assessment of whether a property is in a flood zone. If it is, the new homeowner must buy a flood insurance policy.
- Title services
Charges for administrative costs (such as title search) associated with the delivery of title insurance, as well as the services provided by a title or escrow agent.
- Title insurance
A policy that guarantees that an owner has the title to a property and can legally transfer it to someone else. Should a problem arise, the title insurer pays any legal damages. A policy may protect the mortgage lender, the homebuyer or both.
- Attorney, closing or settlement
The amount paid to an attorney for witnessing the mortgage loan transaction.
- Document preparation
A fee a lender charges to a borrower for producing the documents signed at the closing table.
- Inspections (pest, etc.)
A fee paid to a certified person who searches the dwelling for termites and other destructive creatures.
This fee covers what it costs a lender to send paperwork to the other entities involved in the mortgage transaction.
A fee charged to hire a licensed surveyor to get an accurate measurement of the property and its boundaries.
- Wire transfer fee
The amount charged to transfer funds needed to close on a home loan.