Good Faith Estimate of Settlement Costs. RESPA requires that, when you apply for a loan, the lender or mortgage broker give you a Good Faith Estimate of settlement service charges you will likely have to pay. If you do not get this Good Faith Estimate when you apply, the lender or mortgage broker must mail or deliver it to you within the next three business days.
Be aware that the amounts listed on the Good Faith Estimate are only estimates. Actual costs may vary. Changing market conditions can affect prices. Remember that the lender's estimate is not a guarantee. Keep your Good Faith Estimate so you can compare it with the final settlement costs and ask the lender questions about any changes.
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Highlights
Financed VA funding fee or MIP - Most buyers choose to finance their VA or FHA fees rather than pay them in cash. Origination Fee Paid to Lender - If you don't pay "points," you'll probably pay this fee. The more you pay, the lower your rate. Discount Points Paid to Lender - A point is 1 percent of the loan amount. The interest rate goes down as points go up. Appraisal Fee - Pays for appraiser's services; $150-$350. Credit Report Fee - About $75. Appraisal Review Fee - Shouldn't be charged unless you ask for a formal review. Document Preparation - A fee to pull documents and loan file created. Processing Fee Paid to Lender - A processing fee you should negotiate Underwriting Fee - Another processing fee you should negotiate; usually $150-$300. Courier Fees - Couriers charge up to $50 per trip Other - A catch-all category for expenses that don't fit neatly elsewhere. Make sure the charges are itemized and question any that don't seem reasonable. Flood Certification - A fee to determine if you're in a flood zone; $50-$200. Wire Transfer Fee - Charge for having funds wired or electronically transferred; about $25. Warehouse Fee - Usually a garbage fee of about $200; ask for a waiver. Inspection Fee - Most home-inspectors charge $150-$350. It's worth every penny. VA Funding Fee - Ranges from 1 percent to 3 percent of the loan amount, depending on your down payment and other factors. Settlement or Closing (Escrow Fee) - Can reach $1,000. Negotiate with the seller to split the cost. Title Misc Fees - A catch-all category for unusual expenses incurred by the title company. These usually run less than $100. Notary Fees - Notaries charge $10-$20 per document. May be waived if the lender has an in-house notary. Lender's Title Insurance - You must pay $200-$400 for this insurance, even though it protects only the lender. Owner's Title Insurance - Costs about $250 and protects your interest in the home. Not required, but worth buying. Tax Service Fee - The meaning varies, but this fee involves checking property-tax records and runs $50 to $200. Recording Fees - City or county charges for recording transaction-related documents. Usually totals about $50. Transfer Tax - Local government's tax on the sale. Varies widely from county to county Pest Inspection - Usually $75-$225. Shop around for the best price. |