Origination Fee – Payment to lender to evaluate your credit and underwrite and process loan.
Discount Points – Paid to lender at closing to reduce interest rate over life of mortgage.
PMI or Mortgage Insurance – Required if down payment is less than 20%. PMI protects your lender if you default on your loan.
Appraisal Fee – Paid to appraiser to confirm home’s fair market value.
Title Search – Covers cost to confirm seller owns property, and it is free from liens.
Title Insurance – Protects lender and (optionally) you if title claim surfaces later.
Termite Inspection Fee – Inspection required to certify home is free of termite damage.
Survey Fee – Charge to verify property boundaries.
Flood Certification Fee – Covers cost to determine if home is in federally designated flood zone. If it is, lender will require you to purchase flood insurance. Some lenders also charge a separate flood monitoring fee to check for flood map updates.
Prepaid Interest – Covers mortgage interest due between date of closing and first mortgage payment.
Prorated Property Tax – Covers property taxes from date of closing to end of tax year.
Homeowners’ Insurance – Typically, you’ll pay full first-year cost upfront at closing.
Homeowners’ Association Transfer Fee – Paid on properties governed by associations to transfer ownership documents to you.
Initial Escrow – Lender may require first two months of next year’s homeowners’ insurance, flood insurance and property taxes to build up a reserve.
Closing or Settlement Fee – Paid to title company, attorney or escrow company that conducts closing.
Recording Fee – Paid to state to record transfer of property from one owner to another.
Transfer Tax – Paid to state, based on the amount of the mortgage.
