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There are many fees that apply to loans and mortgages. When applying for a mortgage, be prepared to pay some closing costs. These are a bunch of different fees that are all bunched together and called closting costs. Many people assume that these fees are paid to the lender, but that is not true. There are many different fees that go for many different services performed when applying for a loan. We will discuss a few of these but realize that closing costs can consist of many different fees and are not limited to the ones we will list.

• Points— If you have chosen to pay points on your mortgage or if they are set in the loan, be prepared to pay them at the time of closing.

• Escrow deposits for taxes— These are state taxes that vary from state to tax.

• Private mortgage insurance— Some lenders may require that you purchase insurance in case you default on your loan. This insurance usually cost one-half of one percent of the cost of the loan.

• Appraisal fees— These are fees that are set to pay the appraiser who appraises the home. The home must be appraised before the mortgage is given so that the bank can know whether or not the home is good collateral in case the mortgage defaults.

• Property survey— Sometimes loan officers require to have a survey done of the property so that the exact boundaries are correct.

• Loan orginination fees- These are paid to the lender for processing and organizing all of the paperwork.

• Title insurance— The amount is based on the amount of the loan. This is insurance to protect the title just in case someone else claims to own the property.

• Inspections— Expect inspections of the home and a pest inspection. These are normal before closing on a home.

• Homeowners insurance— This is paid for by the home owner to protect their purchase.

• Credit reports— Lenders will run through credit reports to make sure that you are able to pay back the loan.

There are many other fees that can apply when closing on your mortgage. One important thing to remember is that you must pay attention to each individual fee. These fees can be split up into many different ways, going to many different locations. Review all costs with your lender and if you have questions about where the money is going, don’t be afraid to question them. Many people do not consider having so many fees when applying for a mortgage, but every fee has it’s purpose and place.

Don’t be frustrated or concerned about paying so many fees. Just in keep in mind that there are many different things going into purchasing a home. Buying real estate is a large investment for you and the loan officers are taking a chance by lending you the money. Expect the worse when it comes to closing costs and you may be strongly surprised when it all comes down to it. Most closing costs are anywhere from $2500 to $5000 but it depends on a lot of issues.