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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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