Below is a breakdown of the charges that you will incur during the purchasing of your new home or the refinancing of your present home. Please remember that the amount and terminology of these fees may vary from lender to lender.
Britton & Koontz Fees:
Loan Origination Fee: usually 1% of the loan amount and covers the administration costs for processing the loan.
Loan Discount Points: Fee paid to “buy down” the interest rate for your loan. ( It is advisable to inquire with your tax professional as to whether the discount points are tax deductible.)
Processing & Underwriting Fee: Lender fees which cover the cost of processing and underwriting your loan.
Third Party Fees:
Credit Report: pays for the lender to obtain a copy of a tri-merge credit report which will establish your credit history. This fee is collected at the time of application
Appraisal Fee: Upon receipt of your sales contract or your notification to proceed, the lender will order the appraisal through a 3rd party vendor, who, in turn, appoints an appraiser to visit and evaluate the property you wish to buy. This fee is not collected until you have been provided with the initial early Truth in Lending Disclosures.
Tax Service Fee: A tax service agency will monitor payment of your property taxes. This onetime fee is paid directly to the service company.
Flood Determination Fee: a request is sent to a vendor for the flood zone determination. This flood zone determination is set by the Federal Emergency Management Agency.
Attorney Fee/Title Company Fee/Notary Fee: these fees are for the services of the Attorney, Title Company or Notary depending on whom the buyer chooses to close with.
Title Search/Abstract/Doc Preparation Fee: Your closing agency will perform a title search/abstract to ensure that there are no liens, restrictions, unpaid claims, etc. to the property that you are buying. Once it is determined that the title is clear, your closing agency will prepare the final legal closing documents.
Title Insurance Fee: There are two types of Title Insurance policies, one is a Lender’s policy which is required and protects the lender against any claims that were not discovered during the title search. The other type of title policy is the Owner’s policy. The owner’s policy is not required by the lender, but the borrower may elect to have this extra coverage in case of any unresolved claims against the property.
Recording Fee: Several documents require recording in the courthouse. There is a fee charged for this service. This fee varies from state to state, county to county, and parish to parish. This amount is usually set by the Clerk of Court (LA) or the Chancery Clerk (other states).
Survey Fee: If a survey of the property is required, a surveying company is engaged to produce a document giving you the property dimensions, locations and, if any exist, encroachments.
Inspection Fees: If any type of inspection is required (such as a home inspection, termite inspection, septic tank inspection, private well inspection, etc), the fee(s) are the exact amount(s )passed through for payment to the company performing the inspection(s).
Pre-Paid Items/Escrow & Reserve Accounts:
Hazard/Homeowners Insurance: Prior to closing your loan, you will decide what Insurance Company will insure your home. At the closing, you will bring with you a receipt showing that you have paid for one full year (in advance) along with a copy of the declaration page.
Flood Insurance: If your property is determined to be located in a flood hazard area, you will need to elect an Insurance Company to insure your home. You will need to bring with you a receipt showing that you have paid for one full year in advance along with a copy of the declaration page.
Property Taxes: Prior to the closing, it will be determined if any taxes are due on the property. If there is a seller involved, the amount due will be pro-rated between you and the seller.
Pre-paid Interest: The closing date of your loan will be the determining factor as to how much prepaid interest you will be required to pay. (Example: Your loan closes on June 26th; your first payment is scheduled for August 1st; so you will pay interest from June 26 until July 1st).
Mortgage Insurance: The determining factors of the cost of this insurance will be the type of loan you obtain and the amount of your down payment.
Escrow & Reserves Account: in addition to paying for one full year of your Hazard/Homeowners and Flood Insurance and any property taxes that are due, you will be required to set up what is called an Escrow/Reserve Account. The lender will usually collect 2 months of the annual premium of your hazard, flood and property taxes and place these premiums in this account. Upon receiving the bill for the yearly premium the following year, the lender will have the funds in your account to pay the annual amount that is due.