June 4, 2016

Guide to Fees and Third Party Closing Costs

When applying for a mortgage in California, the two most important details for most people are the interest rate and the closing costs.  Interest rates are usually more transparent, and are fairly easy to compare.  Closing costs are usually not disclosed as clearly until you’re further into the process, and maybe you’ve already submitted your application.  At some of the major banks, this may mean you’ve already paid a few hundred dollars for an application fee.

Equity Builders Home Financing and Real Estate does not charge an application fee.  The only upfront fee that you’re responsible for is a credit check.  This is $19.50 per applicant or $21.50 for a joint application, and goes directly to the credit agency.  We do not make any money off of this fee.  When you click on our Apply Now link, you will be taken directly to our application site, run by our credit agency.  They collect the fee, and they will also provide you with a summary of your credit scores after you’ve finished the application.

The cost of the appraisal is also paid by the borrower at the time the appraisal is ordered. The appraisal will be ordered after you have received your loan disclosures.  This cost ranges from $385-$450 for single family homes.  It varies based on the wholesale lender that we submit your loan to.  We will always place your loan with the best lender for your particular scenario, which may or may not have the lowest appraisal fee.

Now, on to our standard closing costs.  These costs are the base costs associated with your loan.  Some are not optional, but some are.  We have found that First American Title does an excellent job and provides very fast and efficient service at very reasonable prices, so the prices here for title and escrow services reflect their rates.  You are free to choose your own title and escrow service, but must notify us at the time of application, before escrow is opened and the title report is ordered.

Standard Closing Costs for Conventional Purchase and Refinance Loans*

Lender Fee –   $895 – $1200

Our Origination Fee – 1-2% (paid by the lender and included in the quoted rate)

Appraisal Fee  – $385 – $450  (paid directly by credit or debit card)

Credit Report  – $19.50 per applicant (paid directly)

Tax Service and Flood Certification  $75

Escrow Fee   $450 for loan amounts above $100,000

Lender Title Policy  $385 for loan amounts $250,000 and under, higher loan amounts will cost more.

Notary Fee – $200 – $250

County Recording Fees   $75 – $150, depending on county and required documents

Daily Prepaid Interest (charged daily from date of loan funding until the end of the month)

Optional Fees:

Property Tax Escrow Account  *Optional with a 20% or greater down payment.

Homeowner’s Insurance Escrow Account   *Optional with a 20% or greater down payment.

Homeowner’s Insurance Policy One Year Premium   *Optional with a 20% or greater down payment.

*The closing costs quoted on our daily interest rates assume the higher end of the range for closing costs.  These fees will vary based on lender used.  Equity Builders Home Financing and Real Estate is a California mortgage broker, so we shop for the best wholesale rates and terms available for your particular loan, and will submit your loan to the best available lender.

**The closing costs posted on our daily interest rates already reflect any lender credit available for that particular rate.  For example, if the interest rate is 4.5% with a lender credit of 0.5 points on a $180,000, that would equal a lender credit of $900.  ($900 is 0.5% of $180,000)  $900 is credited toward the payment of your closing costs.  You can almost always choose a higher rate with a higher lender credit, or a lower rate with no lender credit.  If you want to get the lowest rate possible, you can “buy down” your rate by paying points.  A point is equal to 1% of your loan amount.