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Common Mortgage Fee Glossary

Below are commonly used terms to describe fees associated with the origination and closing of a mortgage loan.  You will find these fees listed in the regulatorily prescribed Loan Estimate and Closing Disclosure as well as other documents used by lenders to provide estimates of fees ahead of the mortgage loan process.

Lender Fees

Loan Origination Fee – fee charged by the lender to originate a new mortgage loan; typically 1% of the loan amount and paid at closing

Discount Points – variable fee paid to obtain a below-market interest rate and calculated as a % of the loan amount and paid at closing

Appraisal Fee – fee charged by the appraiser to appraise the subject property to be financed, and to provide a detailed report to the lender on the property including his assessment of the market value of the property upon which the lender relies in the lending process; typically collected at the time of application

Credit Report Fee – fee charged by the credit reporting agency for a credit report upon which the lender assesses credit risk; may be collected at the time of application or closing

Flood Certification Fee – fee charged by the flood certificate company to determine the property's location in a flood zone and ongoing coverage in the event of changes in or out of a flood zone; typically collected at closing

Tax Research Fee – fee charged by the tax research company to provide initial property taxes in conjunction with a new mortgage loan and to monitor annual changes in property taxes for the life of the loan; collected at closing

Administrative Fee – fee charged by the lender to cover expenses associated with processing the loan; comparable to separate charges for a Processing Fee, an Underwriting Fee, and a Closing Fee; typically collected at closing

Third Party Fees

Settlement or Closing Fee – fee charged by the title company, escrow company, or attorney to close the loan, which is the signing of the legal documents for the lender in both purchase and refinance transactions, and for the seller as well in a purchase transaction; collected at closing

Lender's Title Insurance – insurance premium charged by title company to insure the lender from potential loss from defects in past title (ownership); collected at closing

Owner's Title Insurance – an optional insurance premium charged by title company to insure the owner from potential loss from defects in past title (ownership); collected at closing

Endorsements – fee(s) charged by the title for extended title insurance coverage as required by the property being financed and the lender; collected at closing

Recording Fee – fee(s) charged by the county or other taxing authority to record the legal documents transferring title, securing property interests to the lender, and/or releasing existing liens; collected at closing

Interest – interest charged by the lender from the day of loan funding/disbursement through the end of the month; collected at closing

Mortgage Insurance Premium – insurance premium charged by a mortgage insurance company when down payment is less than 20% on conventional loans, partially insuring the lender in the event of borrower default; commonly collected on a monthly basis with the mortgage payment, though one-time up front premium plans may be available

Hazard Insurance Premium – insurance premium charged by the homeowner's insurance company insuring the property against loss; collected at closing and paid annually to the insurance company by the borrower or through the monthly payment to the lender that then pays the insurance company annually

County Taxes – property taxes charged by the taxing entity in which the property is located; collected at closing and commonly with the monthly payment thereby placing responsibility on the lender to ensure property taxes are paid when due

 

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