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UNDERSTANDING
APPRAISALS
Lenders require an appraisal
to ensure that the property is
valued accurately to protect
their investment. A licensed
or certified appraiser will
assess the size and condition
of the property along with
additional upgrades, features,
etc… and then compare
them to similar houses (aka
“comparables”) in the area to Mini Glossary of Lending Terms
determine what the property
is worth. Sometimes the APPRAISAL FEE: MISCELLANEOUS TITLE
appraisal report is used to A one-time fee to pay an CHARGES:
renegotiate the sales price. independent appraiser to The title company may charge
The Buyer can expect to pay determine the value of the fees for items such as title
for the appraisal either before property. policies, document preparation,
or at closing depending on recording fees, and an escrow
the lender’s requirements. CREDIT REPORT FEE: fee. Check with your escrow
A one-time fee covering the cost
of the credit report. officer for details.
DOCUMENT PREPARATION PMI PREMIUM:
FEE: Depending on your down
There may be a separate fee payment, you may have to pay an
covering the preparation of the up front fee for private mortgage
final legal papers. insurance (PMI).
HOMEOWNERS FEE: PREPAID INTEREST:
This is a per diem charge that
Some associations may require will vary depending on the time
an up front deposit or dues, as your loan closes. Interest begins
well as a fee to transfer their accruing the day your loan closes
records from Seller to Buyer up to your first payment.
(transfer fee). These amounts
vary for each association. TAXES AND HAZARD
LOAN DISCOUNT: INSURANCE:
Depending on the month your
A one-time fee to adjust the property closes, you may be
yield on the loan to what market required to reimburse the Seller
conditions demand. Some for property taxes. You will have
lenders refer to these as points. to pay a year’s hazard insurance
LOAN ORIGINATION FEE: premium up front, any may be
A one-time set up fee charged by required by the lender to put a
the lender for their administrative certain amount for taxes and
costs. insurance in a reserve account.
Luisa Menchaca & Yvette Romo This account is held by the
(Westgate) lender.
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