Understanding The Good Faith Estimate - Part 2

Today we discuss title, escrow, and recording fees. These are fees that are paid for things other than loan charges. These are what it actually costs the broker / lender to process your loan.

?Closing or Escrow Fee: This is paid to the escrow company (or attorney in some states) who handles the closing of the loan. They are the neutral 3rd party between you and the lender. This fee is usually a fixed rate fee ($500 - $995?avg) for refinance and a percentage based fee for purchases ($2 per $1,000 ie: $500K = $1000).

Document Preparation Fee: This fee is paid to escrow for preparing the actual loan documentation for your signatures. Fee can vary but an average would be $100 - $200

Notary Fees: This is paid to the notary who witnesses your signatures. Again fees can vary but the going rate is $10 per signature they attest to. This averages $100 for a loan, $200 for 2 borrowers.

Attorney Fees: If you live in a state that uses attorneys in lieu of escrow this is where that fee would be.

Title Insurance: This is a mandatory item for home financing. It is the insurance policy that assures you the title is clear. If anyone showed up and had a claim to the property that was not showing on title this policy would cover you against loss. All lenders require title insurance when getting a home loan. It is issued by the title company.

Recording Fees: These are the fees charged by the county courthouse in your area for the actual recording of the deed.

City, County, State Tax stamps: Some states have special fees charged by state, city or county municipalities which would show here.

Pest Inspection: This is a requirement of purchases but not refinance (unless infestation was found during an appraisal). This fee is listed here.

This a summary of all the fees for title, escrow, state and local government fees, and recording fees.

Tomorrow we conclude with Part 3: Lender Required Fees, Reserves, Summary

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