Settlement Statement: Understanding the terms
Upon closing on a house, you will receive a settlement statement. This document itemizes all of the monetary transactions that are involved. However, its not always easy to understand. Here are definitions of a few of the terms that commonly appear on a settlement statement.
Loan origination fee: A fee charged by the lender for processing the loan.
Appraisal fee: The cost of having the property appraised (assessing its market value).
Credit report: A report of your credit history that a lender uses to determine your creditworthiness. It shows your history of borrowing and repaying money.
Documentation preparation: The cost of preparing all of the documents for closing.
Final inspection: The cost for performing a final inspection to make sure all agreed-upon repairs have been completed.
Title: The cost of the document that proves ownership of the property.
Notary fee: The fee for having a person, who is licensed as a public notary, verify the signatures on the document.
Attorney fees: Many states require an attorney to be a part of the closing process. A fee for this service may appear on the settlement statement.
Title insurance: Protects lenders and property owners against any potential hidden claims against a property.
Photocopies/facsimile fees: Charges for all of the paperwork.