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Costs Associated With Home Loan 


If you are looking for a loan for a new home or to build a home or if you plan a mortgage refinance or a remodel, you can find a huge array of loan programs that may meet your needs.  Whether you have stellar credit or not so great credit you can find a loan.  Perhaps you have greatly improved your credit and need mortgage refinancing to pay off that bad credit mortgage loan you got a few years ago.  No matter what kind of loan you need, you will be able to find it.  No matter what kind of loan you find, you should know that there are costs associated with a home loan. 


One of the commonly assessed costs for a home loan is the lender fees.  These fees are charged to cover the lender's expenses that are associated with the loan origination and processing.  Verifying credit reports, origination fees, and even discount points can fall under the heading lender fees.  These fees can run anywhere from 0 to two percent of the total loan amount, depending on the type of loan and the lender. 


Another fee that is often required when you apply for a home loan or mortgage refinance is the appraisal.  A certified appraiser must be paid to verify the current market value of the home.  Usually, they will do the research to see what other homes in the area have recently sold for and they often walk through the home to measure and verify the number of square feet and the actual condition of the home.  They look for issues that would affect the value.  Different lenders require different types of appraisals, so the cost will often vary from one lender to the next. 


Title fees are another cost associated with a home loan.  The title company must research the title and produce a title policy once they have determined that the title is clear.  They are the ones that are responsible for closing the loan and recording the legal documentation such as the Deed of Trust that is required. 


If you are selling a home, you will also be responsible for the real estate commissions to the realtor who marketed and sold your house as part of the closing costs.  Sometimes these commissions are split between the buyer and the seller.  This fee is one of the largest fees associated with a home loan, but it is often negotiable.  Shopping around for a realtor who will work with you for a reduced commission can really help lower your closing costs.  By learning about all of the closing costs you won't be shocked when you close the loan.