Know the Numbers

Getting
Started

Shop For A
Loan

Know The
Numbers

Get Pre-
Approved

Applications
& Processing

Funding
 

Credit Report

With your permission the lender will order a review of your outstanding loans and your repayment history from a third party credit agency.

Application / Processing Fee

This cost, typically a few hundred dollars, is charged to cover the lender’s work to evaluate your ability to repay the loan. Most lenders will credit this back to you upon closing.

Points

When mortgage companies are competing by offering lower interest rates, they may charge you a one-time pre-paid interest payment calculated as a percentage of the loan. This charge is called “points” and may range from 0.25% to 2% of the loan balance and is usually paid at closing. Points are tax-deductible so be sure to consult with your tax advisor.

Appraisal Cost

Lenders hire experienced, independent appraisers to evaluate the property’s purchase price, condition and size compared to similar recent neighborhood sales. This helps ensure the purchase price is not too high, and gives the lender more confidence in getting repaid in the event they are forced to sell the property if the borrower defaults. The appraisal costs vary depending on the property, type of appraisal, and region.

Miscellaneous Fees

Expect to see various charges incurred in the processing of your loan which might include notary, courier, and county recording fees.

Prepayment Penalties

These vary widely, so be sure to ask in advance if your lender will charge a penalty if you refinance or sell, and the certain period during which the penalties apply.