Closing Costs Defined: Lender Fees for Buying Bloomfield Hills Real Estate

The closing table can be a confusing place. You have what seems like mountains of paperwork pushed in front of you. You sign countless pages, often not completely understanding what is written. People often leave the closing on their Bloomfield Hills real estate wondering if anyone took advantage of them.

When you understand the meanings of the words that are included in the closing paperwork, you’ll feel more secure about what you’re signing.  To help you gain that knowledge, here are definitions for some of the most common lender fees included as part of closing costs when buying Bloomfield Hills real estate.

• Appraisal Fee: This covers the cost of the appraiser who assesses the property’s value.

• Credit Report: Lenders check your credit history before approving you for a mortgage. This covers the cost of your credit report. 

• Discount Points: This fee lowers the interest rate on your loan. Each discount point costs 1% of your loan amount and reduces your interest rate for the life of your loan (usually by fractions of percentages).

• Flood Certification:  This is the cost of the automated service that tells the lender whether or not the property is located in a flood plain.  If it is, it may require flood insurance.

• Lender’s Inspection Fee: This fee usually applies to new construction. It covers the cost of inspections performed by the lender, but does not include pest inspections.

• Mortgage Broker Fee: This fee covers any fees or commissions paid to the mortgage broker.

• Mortgage Insurance Application Fee: Mortgage insurance protects the lender and pays a portion of your mortgage in case you die or default on your loan. This fee pays for mortgage insurance processing.

• Processing Fee: The lender charges these fees to process and approve a mortgage.

• Tax service fee: This fee covers the cost of the lender setting up your tax escrow and monitoring the payment of your property taxes.

Let me help you take the confusion out of closing costs. Call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information about lender fees for your Bloomfield Hills real estate.