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| Once
you apply for your loan, RESPA requires
that your lender provide a Good Faith
Estimate of all closing costs within
three business days of your application.
The lender is also required, under the
Truth in Lending Act, to provide a disclosure
estimating the costs of the loan you
applied for, including your total finance
charge and the Annual Percentage Rate
(APR), within the same three days. Finally,
you will receive a statement of actual
closing costs from your lender at or
before settlement. |
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| One
of the main reasons people end up paying
more for their loans is that they don't
lock in their rates for a long enough
period of time. The fees outlined below
are generally associated with every
home loan, and are some are even required
before the close. It is also important
to find out how long your rate lock
is good for and if it will extend long
enough to get you through the loan process.
Closing in a busy lending market, appraisers,
title companies, underwriting departments
and other involved parties can get backed
up. Additionally, there may be other
occurrences that arise and delay the
process. Keep in mind that, although
you secure a rate lock for 15 or 30
days, you may not be able to close in
that amount of time. |
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| Application
Fee and Credit Report
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| The
application fee imposed by your lender
covers the initial costs of processing
your loan request, and usually includes
a credit report check. The application
fee with a credit report can range from
$400 to $525. |
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| This
fee covers an independent appraisal
of the home you want to purchase. The
lender requires this estimate of the
market value of the house in order to
make the loan. The appraisal fee varies
depending on the purchase price and
size of the home. For a $100,000 home,
the minimum fee would be approximately
$275.00. |
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| You
may be required to pay for the legal
services for settlements that are conducted
by lending institutions, title insurance
companies, escrow companies, real estate
brokers and/or attorneys. In most cases,
whoever conducts the settlement is providing
a service to the lender. You should
also retain your own attorney to represent
you at all stages of the transaction.
Attorney fees are usually based upon
the purchase price of the home and the
complexity of the sale, and can range
anywhere from $600 to $1,000 and up.
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| Some
lenders charge miscellaneous fees for
various services, such as underwriting,
processing and documentation preparation,
which usually total less than 1 percent
of the loan amount. |
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