| CLOSING COSTS |
| TERM | DEFINITION | COST |
| Loan Origination Fee | This fee covers the lender's administrative cost in connection with the loan. | 1% of loan amount |
| Discount Points | A one-time charge used to adjust the yield on the loan to market conditions. | Each point equals 1% of the loan amount |
| Appraisal Fee | A fee for a statement of property value made by an independent appraiser. | $300-$500 conventional loan; $500 FHA loan |
| Credit Report | A report obtained from a credit reporting agency detailing the borrower's credit history. | $50-$75 |
| Underwriting Fee | Cost to process the loan. | $200-250 |
| Flood Determination | Fee to determine if subject proprety is in a designated flood hazard zone. | $10-$20 |
| Tax Service Fee | Fee to a 3rd party company to ensure property has clear title. | $60-$80 |
| Application Fee | Fee charged to process application; may sometimes include credit report and/or appraisal fee. | $200-$250 |
| Attorney Fee | The closing is normally handled by the buyer's attorney. The attorney is responsible for obtaining title insurance, handling and computing the closing statement (including all prorations and adjustments) and recording pertinent documents. The deed is normally prepared by an attorney selected by the seller. However, the seller often chooses to use the buyer's closing attorney for preparation of the deed. | $450-$600 |
| Title Insurance | Protects against loss due to problems or defects in the title which cannot be found or aren't found on public record. This insurance is required by the lenders and the cost is borne by the buyer. It is a one-time fee payable at closing. Both lenders' and owners' policies are available. Although not necessarily required by the lender, an owners' policy is strongly advised. | $2 per $1,000 of coverage |
| Recording Fees | Recording fees for deed, deed of trust, and any and all other documents. | $35 |
| Survey | A survey is required to show the exact locations of the house and the lot line, along with easements, buffers and setback lines. | $200-$300 |
| Home Inspection | The buyer's option to have a home inspection per Paragraph 12 of the Offer to Purchase and Contract. | $200-$500 |
| Pest Inspection | A report from a NC licensed pest control operator stating as to the evidence of wood-destroying insects resulting in damage. | $75 |
| Transfer Taxes | Transfer taxes in NC are computed on the selling price and are paid by the seller. | $2 per $1,000 |
| PREPAIDS/RESERVES |
| Funding Fee | A fee charged by the Veterans Administration on all VA loans. | 2% of loan amount if veteran pays no down payment; 1 1/2% if 5% down payment; 1 1/4% if 10% down payment; 3% if veteran has used VA prior funding, not putting down minimum of 5%. |
| Interim Interest | Collected on the loan from the date of closing for the balance of the month when closed. | |
| Private Mortgage Insurance | Required in mortgages with a loan-to-value ratio of > 80%. Some lenders require the entire premium paid at closing while others require a percentage at closing with monthly payments escrowed. Mortgage insurance protects the lender from loss due to payment default. Mortgage insurance can allow a borrower to obtain up to 100% financing. | Premiums vary with coverage |
| Hazard Insurance | Lenders require a fire (and extended coverage) policy covering at least the amount of the mortgage. If the property is in a flood prone area, flood insurance is mandatory. | First year premium is paid at closing |
| Escrow Deposits | Funds held in an account by the lender to assure future payment for such recurring items as real estate taxes, hazard insurance and mortgage insurance. | 2 months hazard insurance, 2 months mortgage insurance, 5 months taxes (average) |
| FHA Mortgage Insurance | Mortgage insurance required by HUD. May be paid at closing or financed with loan amount. | .0225 x loan amount (if financed) |
