Annual Percentage Rate (APR): Relationship between the cost of borrowing and the total amount financed, represented as a percentage.
Appraisal Fee: A fee charged by an appraiser for the appraisal of a particular property. An appraiser is a professional with knowledge of real
estate markets and skilled in the practice of appraisal.
Credit Report: A report from a credit bureau containing detailed information that has bearing on credit-worthiness, including the individual's
credit history.
Discount or Funding Fee: A closing cost either paid in full at closing or financed, that is one of the costs to obtain a guaranteed loan.
Home Owner's Escrow: Money placed with a third party for safekeeping for payment of insurance throughout the year.
Home Owner's Insurance: A form of insurance that protects the insured property against loss from theft, liability and most common disasters.
Loan Origination Fee: The amount charged by a lender to originate and close a loan. Origination fees are usually expressed in points.
Each point equals one percent of the loan amount.
Prepaid Interest: Interest you pay at closing to cover the period from the time the bank funds your loan (the day before or day of closing)
to the date your first payment is due.
Processing Fee: A fee for compiling and maintaining the file of information about a mortgage transaction, including the credit report, appraisal,
verification of employment and assets, and so on. The processing file is handed off to underwriting for the loan decision.
Property Tax Escrow: Money placed with a third party for safekeeping for payment of property taxes throughout the year.
Recording Fee: Charges for recording a deed with the appropriate government agency.
Septic Inspection: A fee for the inspection of a private septic system, to insure it is properly designed and operating normally.
Settlement or Closing Fee: Cost payable by both seller and buyer at the time of settlement, when the purchase of a property is finalized.
These costs can be up to ten percent of the mortgage amount.
State Tax/Stamp: State and local taxes charged for the transfer of real estate.
Tax Service Fee: A fee charged by some lenders at closing to cover the cost of paying taxes on the borrower's property when the come due, or
(if the borrower is paying the taxes), verifying that the payment has been made.
Title Insurance Fee: A fee for a policy issued by a title insurance company insuring the purchaser against any errors in the title search.
The cost of title insurance may be paid for by the buyer, the seller or both.
Underwriting Fee: A fee to the professional who approves or denies a loan to a potential homebuyer based on the homebuyer's credit history,
employment history, assets, debts and other factors such as loan guidelines.
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