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Origination Fee
A fee paid to a lender for processing a loan application. The origination fee is
stated in the form of points. One point is 1 percent of the mortgage amount.
Application Fee
A fee charged by a lender to cover the initial costs of processing a loan application.
This fee does not guarantee that you will be approved.
Commitment Fee
A fee paid by a potential borrower to a potential lender to lend money at a specified
rate within a specified amount of time.
Funding Fee
A funding fee is added to most loan amounts, depending on the amount of down payment
made. In most cases the fee is 2% of the loan amount.
Appraisal Fee
A fee charged by a licensed, certified appraiser to render an opinion of market
value as of a specific date. This fee is paid to the outside appraisal company we
engage to objectively determine the fair market value of your property.
Credit Report
A detailed summary of your borrowing history. Your credit report shows previous
and current credit accounts along with your payment history. Lenders buy credit
reports from when you apply for a loan to determine whether they should take a risk
and lend you the money.
Flood Certification
Federal law requires that you obtain flood certification insurance if you lie within
a flood zone. As part of our evaluation of your property, we appoint a flood determination
company to tell us whether or not your house is located in a flood zone. If your
house is located in a flood zone, you will be required to purchase flood insurance.
Tax Service
This service handles your property tax bills and is used to ensure that the payments
are made on time, and to prevent tax liens from occurring.
Processing and Underwriting
Mortgage underwriting fees cover the cost of evaluating your total loan application
package, including your credit report, employment history, financial documents and
appraisal, to determine whether we can approve your loan request.
Document Review
A fee charged by a lender for the review of documents necessary to fund a loan.
Recording and Search Fee
We pay this fee to your local county recording office for recording our mortgage
lien, and in the event of a purchase transaction, the deed that transfers title.
State Tax to Record Mortgage
This includes both the recording fee and the taxes associated with recording a mortgage
or deed of trust. A recording fee is money paid to a government agent for entering
a new mortgage/deed of trust into the public records. In Virginia the recordation
fee for a mortgage is $46.
Recordation taxes are shared between the state and the city or county in which the
property is located. In Virginia the recordation taxes are calculated based on the
loan amount.
Lender's Title Insurance
Insurance that protects the lender against loss arising from disputes over ownership of a property.
Attorney, Closing, or Settlement Agent Fee
These costs are for professional services that must be performed to process and
close your loan application.
Mortgage Title Insurance
A policy of indemnity issued by a title insurance underwriter or its agent that
insures a buyer or lender against monetary loss or damage due to errors in the title
as described in the policy and undeterminable facts that affect title such as fraud,
forgery, unrecorded documents, unknown heirs, and many other factors.
Postage/Courier
On refinance transactions, an overnight courier is used to expedite the payoff of
your existing loan.
Wire
The transmittal of money via the inter-bank wire transfer system to you, your prior
lender, and/or the title insurance company.
What are Escrows?
Escrows are the deposit by the lender to pay taxes and insurance premiums when they
become due. Your Free Quote can be calculated to include these payments.
What is Mortgage Insurance?
A contract that insures the lender against loss caused by a mortgagor's default
on a government mortgage or conventional mortgage. Mortgage insurance can be issued
by a private company or by a government agency such as the Federal Housing Administration
(FHA).
The secondary market imposes a one time fee on any refinance loan which cash is
being taken out.
