Following are the typical
closing costs that are charged to close a
mortgage with Raustin Mortgage. Not all of
these costs will necessarily apply to your
mortgage however. When you apply for a
mortgage with us we will provide you with a
signed, dated and accurate Good Faith
Estimate. The Good Faith Estimate will list
the various costs based on the mortgage that
meets your needs.
An appraisal is completed by a licensed
professional to confirm the accurate value
of the property financed. The cost of the
appraisal varies depending on the type of
appraisal requested by the lender and the
type of property involved.
$175 - $600
The charge to obtain a credit report for the
applicants of the mortgage.
$22 - $45
Tax Service Fee:
When necessary, a lender may charge a tax
service fee to create an escrow account that
will pay your property tax, mortgage
insurance and homeowner's insurance bills.
$45 - $85
Most lenders charge an underwriting fee for
the administrative costs to review a loan
application for approval.
$175 - $450
The subject property must be inspected to
determine whether or not it lies in a flood
In most transactions, the mortgage will
"close" at a title office. The title company
charges for this service.
$150 - $300
A required insurance policy that protects
the lender against loss arising out of
disputes over the ownership of property.
Most title insurance companies charge the
same premium and that cost is based on the
mortgage amount and type of transaction
(purchase or refinance).
The Register of Deeds charges to have the
mortgage transaction recorded legally. This
fee is collected by the title company at
Varies; generally no more than $50.
The cost to record the assignment of the
mortgage from the broker, banker or lender
to another lender that will service the
RAustin Mortgage charges this fee to
cover internal costs to originate a
mortgage. These costs include but are not
limited to postage, overnight fees,
verification of deposit fees, and additional
credit report fees.
$125 - $210
Origination Fee/Broker Fee:
This fee is charged when adequate
compensation from a lender is not available
for a specific transaction. In most
instances, we are compensated in the form of
Yield Spread Premium (commission) from the
lender. Origination fees are often charged
on government and non-conforming mortgages.
An origination fee may be charged as a
percentage of the mortgage amount or as a
A discount point(s) may be paid by a
borrower to lower an interest rate on a
mortgage. A discount point is equal to 1% of
the mortgage amount and may reduce the rate
by 1/8% to ¼%.
In addition to closing costs, there are
other costs involved with a mortgage. We
believe it is important for you to be aware
of these expenses, and to differentiate them
from closing costs.
Mortgage interest is paid in arrears.
This means that with each monthly mortgage
payment, the borrower pays the interest on
the loan for the month preceding. For
example, your March payment pays the
interest on the mortgage interest accrued
during the month of February. In most
instances, your first mortgage payment will
not be due until the 1st of the second month
after the closing. If the closing occurs
February 15 for example, the first mortgage
payment is due April 1. Pre-paid interest on
the other hand is paid in advance. Again,
assuming a closing on February 15, there
would be 13 days of interest paid in advance
(February 15 through February 28).
Prepaid interest is calculated as follows
(assuming a $100,000 mortgage at 7.5%
closing on February 15).
1. 7.5% / 100 = .075
2. .075 / 365 (days) = .0002054
3. .0002054 x $100,000 = $20.54 (per day)
4. $20.54 x 13 days = $267.02
As calculated, there would be $267.02 in
prepaid interest in addition to the closing
costs for the mortgage.
Most lenders will require you to
establish an escrow account when you have
less than 20% equity in your property. An
escrow account is created with your funds at
the time of close and maintained by the
lender on your behalf. Once you close the
mortgage, the tax and insurance bills will
be mailed directly to your lender for
payment. Each month, 1/12 of your annual
homeowner's insurance premium, mortgage
insurance premium (when applicable) and
property taxes are deposited into your
escrow account. Your monthly house payment
will include these payments.
When you are required, or chose to have
an escrow account, the funds necessary to
establish the account are collected at the
closing of the mortgage. The amounts
collected vary depending on the month the
mortgage closes, the type of mortgage and
the due date of your homeowner's insurance.
To amount collected will be calculated to
ensure that sufficient funds will be in your
escrow account when the various bills are
due. Generally, to establish the escrow
account, a two month surplus will be
The actual amounts required will be made
available to you prior to the closing. Once
a closing date has been scheduled, the title
company calculates the escrow and prepares a
final settlement statement (HUD1). We will
then review this statement with you.
108 N. State St. St
Sparta, MI 49345