Common Fees Explained: Real Estate 101
Purchasing a home is an incredible milestone! But when it’s bogged down by all the mumbo jumbo of real estate jargon, it can get intimidating.
We’re here to help you sort through those confusing terms and help you feel confident in your decision! With knowledge, comes power – and also, just knowing what is what is a great feeling anyway.
Here’s a quick rundown on some of the common fees you’ll see throughout your home buying process:
Origination: This fee will be charged to the borrower from the lender and any mortgage broker for making the mortgage loan. Origination services may include processing your loan application, underwriting and funding the loan, and other services.
Credit Report: The lender will pull a credit report to help decide whether or not to approve your loan and how much money to lend you.
Owner’s Title Insurance: This protects the homeowner’s investment for as long as they own the property.
Lender’s Title Insurance: If you are taking out a mortgage, this protects the lender’s investment in the property.
Closing or Settlement Fee: This is the fee for escrow services, which are provided by a neutral third party that monitors your transactions, prepares documents based on instructions, coordinates the closing and more.
Recording Fees: This fee is charged by a government agency for registering or recording the purchase or sale so that it becomes a matter of public record. Either the buyer or seller can pay this fee, depending upon your agreement of sale with the seller.
Real Estate Commission: The seller usually pays this fee. This is the total dollar amount of the real estate broker’s sales commission, which is typically a percentage of the selling price of the home.
Want to read through a longer list of real estate vocab? Check out Home Closing 101 for more, and be sure to stop by our Alliance Blog for guides and tips on all things real estate.