| Definitions of Closing Costs/Terms |
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Amortization Schedule: A schedule showing the principal and interest payments throughout the life of the loan.
Appraised Value: An option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.
Credit Report: A report on the past ability of a loan applicant to pay installment payments.
Document Preparation: A fee charged by an attorney for preparation of legal documents for a transaction.
Escrow Fee: A fee charged by the title company to service the transaction, to escrow moneys, and to cover the documents. The amount varies with each company, usually split between buyer and seller.
Escrow/Impound Account: Funds held by the lender for payment of taxes, insurance or other periodic debts against real property. Usually does not include maintenance fees.
Homeowner's Insurance: Includes the coverage of Hazard Insurance plus added coverage such as personal liability, theft away from the home (items stolen from the insured's car), and other such coverage.
Inspections: An examination of property for various reasons such as, termite inspections, inspection to see if required repairs were made before funds are disbursed, etc.
Interest: Rate charged for the use of loan funds. Most often paid in arrears.
Loan Application Fee: Paid to the lender at time of application; check with lender for amount.
Loan Discount: The points a lender charges; may be paid by either buyer or seller on conventional loans; number of points fluctuates with mortgage money market.
Maintenance Fee: As applied to condominiums and planned developments, the amount charged each unit owner to maintain the common area. Usually a monthly fee as part of the budget.
Mortgagee's Title Policy: Insures the lender's lien; does not protect the buyer.
Origination Fee: A fee made by a lender for making a real estate loan. Usually 1% of the amount loaned.
Owner's Title Policy: Title insurance for the owner of property, rather than a lienholder. This is a state regulated amount in Texas.
Point: 1% of loan amount.
Prepayment Penalty: A penalty under a note, mortgage, or deed of trust, imposed when the loan is paid before it is due.
Private Mortgage Insurance: Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor).
Realtor Fees: An amount paid to the real estate agent as compensation for services, also known as commission.
Recording Fees: Charged by the County Clerk to record documents in the public records.
Restrictions: Certified copy of restrictions (in deeds of other recorded documents) required by lender.
Survey: The measurements of the boundaries of a parcel of land, its area, and sometimes its topography. It is typically a bird's-eye-view of the land boundaries, easements, and shows how any improvements sit on the land.
Tax Proration: To divide property taxes between buyer and seller proportionately to time of use, or the date of closing.
Tax Certificates: Certificates issued by tax service showing the current year's taxes, the last year the taxes were paid, and any delinquencies to be collected at closing.
I deal with clients showing up without warning at my personal home (this happened 2 times in the past 2 weeks), agents showing up to show my listings without first getting a confirmed appointment, and buyers showing up without permission in advance to see homes. Let me just say it now – this is not okay.
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