1. Appraisal fee: An appraisal is an appraiser's opinion of the value of the property. It is normally required by your lender. The cost of the appraisal is usually collected at the time of application. It is not refundable. The appraiser is not an inspector.
2. Credit Report: Normally required by the lender, a credit report attempts to determine your past payment history, outstanding bills, timeliness of payment, etc. The fee for the report is normally collected at application and is not refundable.
3. Title Search and Insurance: County Courthouse records are examined to determine ownership, presence of liens, encumbrances, etc. The mortgage company can require title insurance only to the amount of the mortgage. Your agent will quote the insurance on the purchase price of the house. Title insurance is an insurance policy that you purchase that guarantees the title search done by the attorney or settlement.
4. Title Endorsements These are normally required by the lender and are issued by the title company. They are "add-ons" to the title policy and cover environmental, survey and municipal issues.
5. Origination Fee: A mortgage charge that covers the cost of originating the loan. The fee is always charged, but is usually incorporated into the interest rate.
6. Discount points: These are fees charged by the lender. Usually they are called "points." A point equals 1% of the mortgage. The collecting of points is simply a way to increase the yield of the loan. Discount points are essentially prepaid interest.
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7. Settlement Fee: Charged when the closing occurs outside the title company's or attorney's office. There is no charge if you close in the title company's office.
8. Processing Fee: Usually paid to the lender or morgage broker for gathering the necessary information for loan approval. This fee often includes loan document preparation.
9. Recording Fees: Courthouse required fees, the deed and morgage are recorded after the closing.
10. Notary Fees: The deed and mortgage must be notarized in order that they may be recorded.
11. Underwriting Fee: Paid to the lender to approve and fund the loan.
12. Buyers Share of Realty Transfer Tax: In Pennsylvania, we have a sales tax on real estate. Generally, the state charges 1% and the local municipality/school systems charge 1%. Taxes are levied on the purchase price and, by custom, split equally between buyer and seller.
13. Survey: Most lenders require a survey that is no older than 10 years. If you want the corners "pinned" it will cost extra.
14. Tax Service Fee: Paid to the company that services the loan. The servicing company sets up your escrow account from which they will pay your taxes and homeowner's insurance.
15. Administration Fee: Often the same as the underwriting fee. Some lenders charge this fee but do not charge a tax service fee or underwriting fees.  (return to top)
16. Flood Inspection: Paid to an independent company to certify that the property is not in a flood plain.
17. Infestation Report: The inspector examines for the active presence of wood destroying insects, and the evidence that they may be present.
18. Well and Septic Inspection: Well reports--wells are usually tested in two areas: quality and quantity of water. The quality test involves taking the water to a lab and having it tested for microbes. The water can also be tested for minerals and chemicals. The quantity test seeks to discover the well's recovery rate. Septic Test--there is no true way to discover what the septic system looks like since it is underground. Inspectors are limited to a septic dye test. After the system is saturated with water, dye is put in the drains and commodes and the inspector examines the drain lines, land and any neighboring streams for signs of the dye.
19. Home Inspections: Home inspectors will inspect either the entire home or the individual systems and components. They attempt to provide an objective report that discloses major problems with the home.
20. Radon Test: Radon gas is found in many areas of the country to widely varying degrees. The gas enters a home through the areas that are in contact with the ground. As the gas deteriorates, it produces radioactive particles. The State Department of Environmental Protection has issued descriptions of the health hazard that exists at various levels.
21. Home Warranty: For a fee, paid by either buyer or seller, a third party warrants various home components and appliances against failure for a period of time.  (return to top)
22. Express Mail: Overnight or guaranteed delivery of mortgage documents or applications.
23. Transaction Fee: Charged by a few Real Estate brokers for paper work preparation.
24. Months' Taxes: Tax pro-ration--this figure can either be a positive or negative, depending on the closing and the tax due date. The seller owes taxes equal to the number of days he owns the home. You owe the balance of the year. If the seller has paid more taxes than owed, you (the buyer) will need to compensate him. The reverse is also true. Tax escrow--this is the amount of money that the bank requires to establish the fund out of which your future real estate taxes will be paid. It is not to be confused with tax pro-ration. The amount needed depends upon the closing date and tax due date.
25. Mortgage Insurance Premium: This is a required feature of every F.H.A. loan no matter what the amount. Most purchasers add the insurance amount to the mortgage so that you wind up financing your purchase. If you sell your home and the buyer does not assume the loan, you should apply for a refund of the insurance.
26. Months' Insurance: In most cases you will need to have a home insurance policy for the closing. Some lenders require that it be paid for prior to the closing. Further, if your lender requires, you may need to put the equivalent of one month's payment to your mortgage payment.
27. Days' Interest: Mortgages are the reverse of rentals in that you pay after having the use of the money. This holds true except for the month of the closing. At the typical closing, you will need to pay the interest for the balance of the month in which you close. Your first true mortgage payment will not be due until the first day of the second month after the closing. When made, it will pay for the first month after the closing.
28. Months' Private Mortgage Insurance: If you are financing your purchase, and wish to borrow more than 20% of the property's value, you will usually be required to purchase insurance that protects the lender against a default on your part. The insurance is normally calculated as a percentage of the loan. The insurance is due annually. Therefore, the lender will collect the equivalent of two months' insurance at the closing and require 1/12th of the cost be added to your monthly payment.  (return to top)

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