A

Amortization Schedule: Schedule showing principal and interest payment throughout the life of the loan.
Appraisal Fee: Fee for lender-required appraisal to establish property value.
Appraised Value: An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc. of the property and surroundings.
Administrative Fee: Fee charged to process the loan for approval. Assumption Fee: Fee assessed by lender to the buyer to assume seller’s existing loan.
Attorney’s Fee: Charges by independent attorney for preparation of legal documents and acts of representation.
Attorney’s Fee (Release): Charge for preparation of the release of lien document when seller is paying off his existing loan. Commission: Fee generally paid by seller to real estate agents for sale of property.

C

Credit Report: Fee assessed by lender for required credit information from credit bureau.

D

Discount Points: Points lender charges to increase the investor’s yield equal to 1% of the loan amount. May be paid by either buyer and/or seller as negotiated per contract. Points fluctuate with mortgage.

E

Escrow Balance: Buyer’s purchase of seller’s existing reserve account, i.e. taxes and insurance.
Escrow Fee: A fee charged by the title company to service the transaction, to escrow monies, and cover documents. The amount varies with company; usually split between buyer and seller.
Escrow/Impound Account: Funds held by the lender for payment of taxes and insurance when due. Usually does not include maintenance fees.

F

Flood Certificate: Required by lender to obtain information designating status of subject property regarding floodplains. Home Warranty Fee: One year home systems and appliances warranty.
Homeowner’s Assoc. Fee: Maintenance fee assessed on property owners within a condo or townhouse complex, a planned unit development or a single family residence subdivision.

H

Homeowner’s Insurance: Protects the property and contents in case of loss; must be for at least the loan amount or 80% of the value of the improvements, whichever is greater.

I

Inspections: An examination of property for various reasons such as termite inspections; inspections to determine the condition of the property and if required repairs were made before funds are received.
Insurance: Premium paid year in advance for buyer’s hazard or homeowner’s policy.

L

Lender Inspection Fee: As required by lender to determine condition of the property.
Lender Required Reserve: Money required by lender, collected at closing, going into its escrow account. Insurance premiums, taxes, etc... are paid from escrow account for borrower.
Loan Application Fee: Paid to the lender at time of application.

M

Messenger Fee: Cover delivery charges incurred.
Mobile Home Processing Fee: Charge by title company to process paper work with TDHCA.
Mortgagee’s Title Policy: Required by lender to insure that lender has a valid lien; does not protect buyer. It is also usually required for second mortgages and seller financed transactions.

O

Origination Fee: Fee buyer pays to lender to originate a new loan. Normally one percent of loan amount.
Owner’s Title Policy: Insures buyer against loss due to any defect of the title not excepted to or excluded from the policy.

P

Pay Off: amount needed to pay off existing mortgage lien on property being sold.
Prepayment Penalty: charged by the lender for premature payment of a loan balance.
Private Mortgage Insurance: Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor).
Processing Fee: Charge to process loan for application submittal to underwriting.

R

Recording Fee: Charge by county clerk to record documents in the public records. Charges are based on per page recorded.
Repairs: any repairs required by lender and/or warranted by inspections and to be paid at closing.

S

Settlement or Closing Fee: Charge by title company to service transaction and to escrow money and documents.
Survey: Land survey required by lender: lot size, easements, encroachments. Location of improvements, etc... May be a negotiated requirement on a cash contract.

T

Tax Certificates: Issued by taxing authorities to show amount of current year’s taxes and the last date that taxes were paid.
Tax Proration: Seller pays buyer from January 1 through the day of closing.
Tax Service Fee: Fee required by lender for collection and disbursement of tax escrow by a servicing company.
Termite Inspection Fee: Required by lender showing property free of active termites. May be a negotiated requirement on a cash contract.
Transaction Fee: Fee charged by third party to assist in coordinating the transaction.

U

Underwriting Fee: Fee lender charges for underwriting the loans on behalf of the investor.

V

VA Funding Fee: An administrative fee charged by the Veterans Administration.

W

Wire/Funding Fee: Lender’s charge for sending “good funds” to title company.