Closing Costs

Loan Origination Fee
This fee is charged by lenders and brokers and and is the main way they are paid for their services.

Underwriting Fee
This fee covers the cost of reviewing your loan application, and is lender-specific. Underwriting is the name of the analysis a lender performs to determine if they are willing to lend you money and under what conditions.

Administrative Fee
This is a fee charged by other lenders/brokers to cover some of their overhaead expenses associated with processing the loan.

Commitment Fee
Any fee paid by a potential borrower to a potential lender for the lender's promise to loan money at a specified date in the future. The lender may or may not expect to fund the commitment.

Processing Fee
A processing fee is charged to cover the cost of processing the loan, and putting the loan file together in a manner acceptable to the lender and the secondary market.

Courier Fee
The cost of sending documents to various parties using couriers or express mail services. These costs are based on actual usage and charges.

Document Preparation Fee
This charge covers the cost of drafting the loan documents.

Addition Settlement Charges
Fees not covered by one of the other HUD numbers can be included as a 1300 series.

Appraisal Fee
The appraisal fee covers the cost of a professional appraiser evaluating your home to estimate its fair market value. The appraisal is used to calculate the loan amount as a percent of the property value. This loan-to-value (LTV) ratio is one of the factors that dictates whether a lender is willing to approve the mortgage application and whether additional fees may be required (e.g., mortgage insurance).

Credit Report
This fee covers the cost of a credit report that will be used by the lender to review your credit history and help determine whether to approve your application.

Tax Service Fee
The lender needs to know that the property taxes are being paid in full and on time because a tax lien would take priority over their lien as a lender. This fee covers the cost of a tax service agency hired to monitor your account. If your taxes are impounded, the agency provides the lender with your tax bills so that the lender can pay your taxes on time. If you pay the taxes yourself, the agency monitors the tax rolls for the life of the loan, and informs the lender if they ever become delinquent so that they can take action to protect their lien position.

Flood Certification
Lenders want to ensure your property (their collateral) is well protected from likely hazards. In addition to requiring hazard insurance to cover events like a fire, they want to know if floods are a concern in your area. This fee covers the cost of a report to determine if the property is in a flood- risk area. The Federal Emergency Management Agency (FEMA) designates flood zones to indicate that certain areas have a high risk of flood damage.

Wire Transfer Fee
When your loan funds, it is a common practice for a lender to wire the funds to the settlement provider (escrow holder, title company, or attorney). This is a fast and efficient way to transfer funds in a transaction where time is crucial. The receiving account charges a nominal fee for the wire transfer.

Addition Settlement Charges
Fees not covered by one of the other HUD numbers can be included as a 1300 series

Homeowner's Association Certification Letter This fee covers the cost of getting a letter from a condominium's homeowner's association that provides background information on the property. For example, they will notify the lender whether they are involved in any litigation, the number of units that are owner-occupied, the number of units that are past due on fees, etc.

Settlement or Closing Fee
This fee pays for the services of the escrow or settlement agent that handles all the financial transfers and payments associated with the transaction.

Mortgage Description
Search Fee
This fee covers the cost of searching the Registry of Deeds to determine if there are any other liens on your property. Often this fee is included in the title insurance fees. The fee varies widely, but is usually a few hundred dollars.

Home Equity Description
Recordation Service Fee
This fee covers the cost of processing the deed recordation. The service includes the assurance that the lien is recorded, all borrowers are vested and/or have the right to permit a lien to be recorded against the property and associated courier services.

Title Examination Fee
This fee pays for a search of all liens secured against your property to ensure that your claim to the property is unencumbered.

Notary Fee
This fee covers the cost of hiring a licensed notary public to certify that the individuals signing documents are who they claim.

Attorney Fee
In some states an attorney performs the functions of an escrow agent, in which case this fee is in place of the Settlement or Closing Fee described above. This fee could vary widely by area of the country and by the attorney you select.

Title Insurance: Lender's Coverage
Title insurance insures against the possibility that there is an unknown lien on your property and ensures your undisputed ownership. The title company will check that no other entity has a lien, unpaid claim or other restriction on your ownership of the property and protects the lender in case a lien does exist that the search did not uncover.

Title Insurance: Owner's Coverage
Owner's coverage also guarantees that your home has no other liens. The difference is that it protects the owner and insures you for the entire value of the property (not just the loan amount). The owner's policy is not necessary in a refinance situation as that policy remains in full force and effect for as long as the owner owns the property.

Delivery / Courier Service
The cost of sending documents to various parties using couriers or express mail services. These costs are based on actual usage and charges.

Environmental Endorsement Fee
Endorsements are used to change the coverage of the title insurance policy. This fee insures the insured against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage over any environmental protection lien.

Title Endorsement Fee
Endorsements are used to change the coverage of the title insurance policy. ALTA policies and other forms of title insurance policies provide adequate coverage for a majority of the "simple" real property transactions. If the transfer of title is not "simple," the policy coverage needs to be added by endorsement to tailor coverage to meet the home owner's, the seller's, and/or the lender's needs.

Recording Fee
Once your transaction closes, your mortgage or deed of trust is recorded at the county recorder's office to make your transaction a matter of public record. The recording fee varies by the county being paid.

County Tax Stamps
Stamps tax on the sale of real property, based on the sale price of equity transferred.

State Mortgage Tax
This is a tax charged by some states as an additional means of collecting tax revenue.

City Tax Stamps
Stamps tax on the sale of real property, based on the sale price of equity transferred.

Intangible Taxes
Intangible tax is an ad valorem tax on the current market value of intangible personal property owned, managed, or controlled by persons residing or doing business in any state which levies this tax.