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Settlement Costs


Balance of Down Payment – difference between purchase price and loan amount, minus the deposit paid at the time the contract was signed.

Lender’s Fees – Lender charges vary. Consult your lender for a schedule of fees.

                        Points – each point is one percent of the loan amount.

                         Document preparation fee – fee to prepare loan documents.

                        Tax service fee – fee for setting up a computerized tax paying service.

                        PMI (Private Mortgage Insurance) – generally charged on conventional loans when making a down payment of less than 20% of the purchase price.

                        MIP (Mortgage Insurance Premium) – charged by HUD on FHA loans. Paid in a one-time premium at settlement, plus monthly payments for the term of the loan unless purchasing a condo, in which case, it is only collected in a monthly escrow.

Escrows – money for taxes, homeowner’s insurance and Private Mortgage Insurance (PMI) that the lender holds for future payments. For the monthly amount, take the annual amount of each bill and divide by twelve.

Settlement fees

            Title Search – fee paid to the title abstractors to search public land records to verify ownership of property.  Identifies loans and liens that must be satisfied from the seller’s proceeds at settlement.

            Title Insurance Premium – amount paid for title insurance coverage. This is based upon loan amount and purchase price.

            Courier – fee for documents to be hand-carried to and from the lender and courthouse.

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