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Understanding Closing Costs...Page 2
Brokers origination fee
This is a number that varies widely. At Homeowners.com we charge a $395 "Processing
Fee" (reduced to $145 if you apply online). In some states a common practice is for
the broker to charge a 1% "origination fee." Some brokers require an "up
front" nonrefundable deposit.
Lender's Fees
These vary over a wide range and are sometimes divided into two or three pieces. This is
what the lender is charging to underwrite your file, print the documents and fund the
loan. This varies from a low of $300 to as high as $850.
Flood Certification
Every little bit of the old USA is divided into FEMA flood zones. This specifies how
susceptible the lot is to flooding. If it is in a flood zone you need flood insurance. The
Flood Certification is an assurance to the lender as to what the flood zone classification
is. The Flood Certification is not flood insurance, it is a guarantee (in most cases) that
flood insurance is not needed.
Tax Service Fee
This goes to a data processing entity which assumes the responsibility of informing your
lender if you become delinquent in your property taxes.
Credit Report
This is what the broker and/or lender pay to get your credit report. The credit reports
used in the mortgage industry are called RMCR's and cost about $50. Statement Fee
If this is a refinance, your old lender may charge as much as $60 for providing the payoff
information to the escrow agent. For the work done, this little fee is the biggest
"burn" in the whole industry.
Reconveyance Fee
Charged by your old lender in the case of a refinancing. This is the cost of generating
and recording the Deed of Reconveyance, a public record that your old loan is paid off.
Notary and Recording Fees
Someone is going to charge you to notarize certain of the loan documents and the Country
Recorder is going to charge the escrow company for recording them.
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