True Costs of a Loan

“Costs to do a loan”

The average cost to do a loan is $1500 to $2400. Keep in mind that the costs will be added to the loan, this way there is no out-of-pocket costs to you. The closing cost includes all the 3rd party fees, and processing fees. 3rd party fees include escrow, title search, and appraisal fees. Depending on each type of loan, the costs will fluctuate, and also depending on the type of situation that you are in will also change the costs.

The best thing for a borrower to do is to get qualified for a few different types of loans and then review the differences. The first worry that a borrower will come across is the costs that are added to the loan amount when refinancing. Even though the costs might seem high at first, you must look at the overall benefit. The term of a loan is 15 – 30 years. If the costs can be recouped within the first couple years, there is definitely a benefit to refinancing so that you may save money for the remainder of the term. Make sure that you ask your loan officer for a break-even analysis before making a decision.

Sample Good Faith Estimate of Closing Costs:

Loan Origination Fee: % of loan amount
Loan Discount: % of loan amount
Appraisal Fee: $350
Credit Report Fee: $35
Broker Processing Fee: $450
Tax Service Fee: $45
Tax Research Fee: $32
Loan Processing Fee: $550
Flood Certification Fee: $17
Settlement / Closing Fee: $500
Abstract to Title Search: $250
Notary Fees: $150
Attorney’s Fee: $250
Title Insurance: $1500
Recording Fees: $50
Escrow Waiver Fee: % of loan amount
Survey: $500
Pest Inspection Fee: $100
Title/ Misc: $1200

These are just some of the fees that might be included in closing costs. Keep in mind that there are many different programs and lenders that will have different fees. Also not every fee will be applicable to everyone. Depending on the location and situation, you will have a different set of closing costs. This is just to give you an idea of some of the costs.