DEFINITIONS

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Administrative Fee Fee charged to process the loan for approval

Amortization Schedule Schedule showing principal and interest payments throughout the life of the loan

Appraisal Fee Fee for lender-required appraisal to establish property value

ARM Loan Adjustable Rate Mortgage provided by lenders

Assumption Fee Fee assessed by lender to the buyer to assume seller’s existing loan

Attorney’s Fee Charges by independent attorney for preparation of legal documents and acts of representation

Credit Report Fee assessed by lender for required credit information from credit bureau

Discount Points Points paid to get a mortgage at a stated interest rate

Escrow Fee A fee charged by the title company to service the transaction and to escrow monies. The amount varies with company; usually split between buyer and seller.

Flood Certificate Required by lender to obtain information designating status of subject property regarding flood plains

Good Funds Funds provided for a transaction, normally in a form of a cashier’s check or wire transfer

Home Warranty Fee One-year home system and appliance warranty

Home Inspection An inspection of the property, to determine the property condition

Homeowner’s Assoc. Fee Maintenance fee assessed to property owners within a condo or townhouse complex, a planned unit development or a single-family residence subdivision

Homeowner’s Insurance Coverage to protect the property owner against covered losses

Lender Inspection Fee Fee to determine condition of the property by the lender

Lender Required Reserve Money required by lender, to be collected at closing and held in an escrow account by lender.

(Typically includes homeowner’s insurance premiums and taxes)

Messenger Fee Lender’s delivery charges

Loan "Mortgagee" Title Policy Required by lender to insure that lender has a valid lien and it may be required for second mortgages and seller-financed transactions. This policy does not protect buyer.

Origination Fee A closing fee paid to the lender to originate a new loan

Owner’s Title Policy Insures buyer against loss due to any defect of the title not excepted to or excluded from the policy

Pay Off Amount needed to pay off existing mortgage lien of subject property

Prepayment Penalty Charged by the lender for premature payoff of a loan balance

Processing Fee Charge to process loan for application submittal to underwriting

Recording Fee Charge by county clerk to record documents in the public records

State Guaranty Fee Fee charged by the State per title policy

Survey The process of measuring land to determine lot size, easements, encroachments, locations of improvements, etc.

Tax Certificates Issued by taxing authorities to show amount of taxes, the last date that taxes were paid and any delinquencies to be collected

Tax Proration The proration of property taxes between the seller and buyer which is allocated for the time property is owned

Tax Service Fee Fee required by lender for collection and disbursement of tax escrow by a servicing company

Termite Inspection Fee Fee to perform inspection to determine if property is free and clear of active termites

Underwriting Fee Fee lender charges for underwriting loans on behalf of the investor

VA Funding Fee An administrative fee charged by the Veterans Administration

Wire/Funding Fee Lender’s charge for sending "good funds" to the title company