Closings Costs vs Lender Fees

When you close or refinance on a home, there’s typically an abundance of fees and costs that must be paid to third parties to cover the expenses associated with processing your loan. These expenses are factored as either closing costs or lender fees. Here is a breakdown of what each fee is for, and how much it could cost you.

Breaking Down Closing Costs

Closing costs can include state taxes, insurance impounds, prepaid interest, interim interest, appraisal fee, intangible mortgage tax, documentary stamps on the mortgage or deed, and various title company fees. Title company fees include title insurance, title closing fees, endorsements, recording fees, and search and exam fees. Home buyers can expect to pay between about two to five percent of the purchase price of their home in closing fees — an average of roughly $3,700.

Breaking Down Lender Fees

Then there’s the lender fees. Lender fees are charged by banks and other financial institutions for processing and funding a loan. Lender fees can include application fees, attorney fees, recording fees, underwriting fees, and more.

What If There Were No Closing Costs and Lender Fees?

These fees and charges to the state and third-party vendors make up a considerable amount of the borrower’s total costs and can be terribly confusing, frustrating, and overwhelming. That’s why RP Funding doesn’t charge closing costs as part of their “No Closing Cost Refinance.” Also, RP Funding doesn’t charge lender fees. You read that right. RP Funding pays the refinancing closing costs on all of their loans and doesn’t charge lender fees in any of their transactions.

If you think that sounds impossible, unthinkable, and too good to be true, then read all about How RP Pays Closing Costs.

For more insight, here is a helpful infograph to further explain the complicated charges of closing costs — something you don’t have to worry about at RP Funding.