What Other Fees Are Included in a Mortgage
Getting a Mortgage in Florida
Each state has its own way of breaking down a loan estimate. So for the sake of this blog, we will go over five specific areas as they pertain to getting a mortgage in the state of Florida.
The Lender Fee
This can also be described as the underwriting and processing fee. In case you are unfamiliar with how underwriting works, an underwriter is a financial expert who looks over your finances and assesses how much risk a lender will take if they decide to give you a loan. Therefore the work and "processing" which goes into determining that is what constitutes this charge.
Title fees can be segmented further into four separate categories:
- Title search fees
- Endorsement fees
- Title insurance
The charges associated with the title search refers to any and all work that goes into researching the title's history. This includes examining public records to determining the property's rightful legal owner and reveal any possible claims or liens on that given property which may impact your purchase.
A title endorsement is to ensure or confirm the absence of any violation against the property that could have a negative financial impact on you or the mortgage company. Determining these factors is what constitutes the charges.
Title insurance protects the lender against any claims on the property. It is a one-time payment which usually costs the home buyer between 0.5% - 1.0% of the sale price.
The surveyor fee will cover the costs of a land survey.
The appraisal fee will be the charges from whichever third-party company does an appraisal of the interior & exterior of the home. While the lender will choose the appraisal management company (AMC) for this process, the cost of the appraiser's services will be passed on to you.
This is really where the state-by-state basis comes into play. In Florida, governmental fees can be summarized with the documentary stamp tax and recording fees.
According to the Florida Department of Revenue, "Documentary stamp tax is due on a mortgage, lien, or other evidence of indebtedness filed or recorded in Florida. The tax rate is $.35 per $100 (or portion thereof) and is based on the amount of the indebtedness or obligation secured, even if the indebtedness is contingent."
Discount points are fees paid to a lender to reduce the interest rate. Paying for these points is commonly referred to as “buying down the rate.” Each point purchased costs 1 percent of the total loan amount. Essentially, you are making additional upfront payments in order to save more over the course of the loan.