US Loans Mortgage

Settlement costs

There are so many different charges involved in buying a home, it is important to know what to expect at the settlement. Your lender is required to give you a Good Faith Estimate (GFE) of your settlement costs within three business days of your loan application. We at U S Loans will give you one BEFORE you even apply! Once you get it, review the charges below to avoid any surprises when you sit down to close on your loan.

There are three basic categories of settlement costs:

Fees to get a mortgage. This includes lender fees and points when you want them to get a lower rate, as well as a host of other charges involved in obtaining and processing your loan. Points are an upfront charge expressed as a percent of the loan amount (e.g., 1 point is 1 percent of the loan) to increase the lender's effective yield on a loan.

Specific lender fees can include:

Loan Origination Fee - This is a charge that some brokers or lenders will try to sneak in as a real fee. It is not. It is jsut a fancy name for points. BEWARE! Some people will tell you there are no points, but they charge an origination fee.
Application Fee – This charge covers the initial costs of processing your loan application and obtaining your credit report sometimes. We at U S Loans do NOT charge one!
Appraisal Fee – Your lender will need an opinion from an independent appraiser of the market value of the home you wish to purchase.
Survey – This fee goes to a surveying firm who will verify that your lot has not been encroached upon by any structures since the last survey conducted on the property and to ensure that the home and other structures and legally where the seller says they are. This is only needed in some states, not all.
Mortgage Insurance – A lender may require this type of insurance for buyers who make a down payment of less than 20 percent of the value of the house. The policy covers the lender's risk in the event the buyer fails to make the loan payments. Premiums are typically paid annually from an escrow or reserve account, or in a lump sum at closing.
Homeowner's Insurance – Insurance that protects property against loss caused by fire, some natural causes, vandalism, etc., depending on the terms of the policy. Also includes coverage such as personal liability and theft away from home. Your lender will expect you to have a policy in effect by closing.

Fees to establish and transfer ownership of the property. Your lending institution is not likely to give you a loan on a house unless you can prove that the seller owns the property you want to buy. This is where title search and title insurance fees come into play. A title agent will verify that the seller is, indeed, the owner of the property and issue a title insurance policy to guard the lender against any errors that could have occurred in the searching process. The cost of the policy is usually based on the loan amount. There may also be attorney, escrow, courier fees and other charges involved in the settlement process.

Fees to state and local governments. These fees include transfer, recordation and property taxes collected by local and state governments. Your taxes based on the assessed value of the home, which you pay for community services such as schools, public works, and other costs of local government. Taxes can often be paid as a part of your monthly mortgage payment.