Loan Origination Fee
This covers the administrative expenses in setting-up and processing your loan. The loan origination fee is normally a percentage point of the mortgage amount.
Discount Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 discount point would equal $1,500.
Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted. This is known as a “pass through” fee since it pays for the appraisal directly.
Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.
Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and the end of the month of closing. For example: If closing is on June 15. Your first monthly payment begins to accrue interest on July 1 with your first mortgage payment due August 1. At closing an interest payment covering the accrual period between June 15 and June 30 will be required.
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.
The Nashville real estate market is an exciting place to buy.
