Mortgage fees can be categorized into three general categories: lender-controlled fees, title-related fees, and state-imposed fees.
Here is a breakdown of the fees associated with home loans by category:
Lender-controlled fees:
Origination fee: A fee charged by the lender for processing and underwriting the loan.
Application fee: A fee charged by the lender for reviewing the loan application.
Underwriting fee: A fee charged by the lender for evaluating the loan application and determining the borrower's creditworthiness.
Processing fee: A fee charged by the lender for processing the loan application.
Title-related fees:
Title search fee: A fee charged for conducting a search of public records to verify the property's ownership history.
Title insurance fee: A fee charged for protecting the lender and the borrower against any losses resulting from disputes over the property's ownership.
Survey fee: A fee charged for verifying the property's boundaries and identifying any encroachments.
State-imposed fees:
Recording fee: A fee charged by the state or local government for recording the mortgage and the deed with the appropriate authority.
Transfer tax: A tax imposed by the state or local government on the transfer of the property's ownership.
Mortgage tax: A tax imposed by some states on the mortgage loan amount.
Property tax: A tax imposed by the state or local government on the value of the property.
It's important to note that not all of these fees may apply to every mortgage transaction, and some fees may be higher or lower depending on the state or location of the property. The lender-controlled fees are typically set by the lender, while the title-related fees are typically set by the title company or attorney handling the closing.
State-imposed fees are set by the state or local government and can vary widely depending on the location of the property. It's important to review the Loan Estimate and Closing Disclosure carefully and ask the lender questions about any fees that are unclear.
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