Definitions:

Lender Fees: The fees paid to the lender during the home buying or refinancing process including at closing. Lender fees compensate the lender for processing, underwriting, approving and issuing the loan, and comprise part of a borrower’s loan closing costs.

Prepaid Fees: Lenders typically require prepayment of a portion of the recurring fees (Flood Insurance, Property Tax, Homeowners Insurance, etc.) to be paid in advance at closing.

Origination Fee: The fee charged by the lender to process the loan application.

Credit (or charge) for Interest Rate: The amount of credit a borrower can receive or be charged (points) to pay for the specific interest rate received. A charge usually involves paying points to receive a lower rate (buying down the interest rate).

Appraisal Fee: The cost of an independent appraiser to estimate the value of the property.

Credit Report Fee: The fee charged by some lenders for running the borrower’s credit report.

Tax Service Fee: A fee paid to the lender to verify that property taxes are paid for the term of the loan.

Flood Certification Fee: The fee charged to determine whether the property lies in a flood zone.

Upfront Mortgage Insurance Fee: Also known as mortgage insurance premium, the upfront payment required to obtain public mortgage insurance, which is required for FHA loans. It is calculated as a percentage of the loan at closing.