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Closing Costs - What are
they & why are they?
Closing Costs are the fees
associated with different services provided throughout the loan
transaction. Different lenders may call the fees by different names but
generally are defined as follows:
ALTA Title Policy -
Protects the lender. Based on loan amount.
CLTA Title Policy -
Protects the borrower (purchase transactions). Based on purchase price
of property.
Escrow Fee - Charged by
closing agent/Title Company. Based on purchase price or loan amount on
refinances.
Appraisal Fee - Charged
by appraiser to assess the value of your home. Based on the value of
your home.
Processing Fee - Charged
by loan processing company.
Underwriting Fee -
Charged by underwriting company.
Credit Report Fee -
Charged by credit reporting company.
Tax Service Fee - Charged
by tax service company to monitor your tax payments.
Wire Transfer Fee -
Charged by banks and Title Company to wire funds.
Flood Certification Fee -
Charged by Flood Cert Company to verify property flood zone status.
Funding Fee - Charged by
lender to review funding package.
Document Preparation Fee
- Charged by lender to prepare final loan documents for signing.
Administration Fee -
Charged by lender to cover administration costs.
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