Application fee. This covers the upfront cost of processing and taking the initial home loan request
and could include the credit check and other administration fees.
It cannot be more than $100 in the State of Kentucky. We never charge an application fee in
Kentucky for a mortgage loan but some mortgage lending companies will collect a credit report
fee upfront. Just depends.
Appraisal fee. This is paid to a third-party appraiser to determine the property value. A professional
appraiser will come out to the home and evaluate its market value. This generally costs between
$300-$500. Appraisal fees in Kentucky have went up due to the new laws that state we have to use
a third party (AMC) to order the appraisals and they add their costs to the report. A typical appraisal
in a suburban area usually costs around $300, sometimes more in rural areas with less appraisers to
choose from, but with the added costs of the AMC this has really increased the costs of appraisal
reports.
Attorney fee. This is paid to the attorney to review all the financial documents prepared. Not all
states require an attorney. In Kentucky you can use a title company with most closing fees being
between $400 on the low-end to high-end $650. This can also be called an closing fee by a title
company
Origination fee. Lenders charge this to process your loan paperwork and is typically about 1% of the
loan amount. Sometimes lenders will charge more origination fees in exchange for a lower rate.
Sometimes this is called paying discount points to buy-down the rate upfront.
Credit report fee. Lenders may charge the borrower for pulling your credit report. They cannot charge
more than the actual invoice used at closing, so make sure to check this out at closing.
Home inspection. A professional inspector will come to the home and is tasked with uncovering
any problems such as a leaky roof, mold, plumbing, electrical or hvac unit or other structural issues.
Typical costs will range on the low-end from $275 to high-end $550.00 with most being around
the $350 to $400 range.
Points. If your interest rate was locked with points, you will have to pay that amount at closing.
One point is equal to 1% of the loan.
FHA Upfront MIP. This fee is collected by the lender and sent to HUD or FHA to insure the loan.
The current upfront funding fee is 1.75% of the loan amount in Kentucky.
Processing Fee: A fee charge by the lender to process your mortgage loan. Most processing fees
are between $300 to $650 in Kentucky for mortgage loans. Not all lenders will charge this just
like other fees
USDA Funding Fee: This a a fee charge by USDA to insure a USDA Rural Housing loan.
The current upfront funding fee paid to USDA is 1% of the loan amount. This is almost always
s financed into the loan and not paid out of pocket by the borrower. For example, if you finance
an $100,000 USDA no money down, your total loan amount would be $101.000
Property insurance. This is paid to insure the property. The insurance amount depends on your
provider and the size of the home. Insurance costs could be added to escrow and collected each
month as part of the monthly mortgage payment. Usually you have to have the first year of home
insurance premium paid at closing. This is sometimes called a prepaid expense.
Property taxes. The tax amount would be prorated for the year. Like property insurance, this could
also be included in the monthly mortgage payment. All real estate taxes in each 120 Kentucky
Counties are due on December 1st
Title search. This fee covers the search for any liens on the property and to insure the person
selling is indeed the owner. Typical title search fees are around $200 to $400 depending on they
attorney or title company handing the title work for the Kentucky Home loan.
Title Insurance. There are two types of title insurance. Lenders and Owner's title insurance.
Lender's title insurance is always required, where owner's title insurance is optional in Kentucky.
Basically it protects the title search done on your home in case there was a mistake made in the
title search process. i.e. missed lien, encroachment, boundary dispute, missed judgement or old
mortgage not paid off that could close the title once you go to refinance or sell the home down the
road.
VA Funding Fee. If this is a VA loan, you may need to pay the VA funding fee or you can roll the
fee into your loan. This fee is used to support the government VA loan program.
Learn more about the VA funding fee. Fee varies from 2.30 to 3.6% depending on use of loan.
If you are disabled, you may have the right to get this wavier by VA
After going over the fees and looking through the documents, take time to ensure all information
is accurate. Check the loan amount, interest rate, term and monthly payment. Note that many home
buyers decide to roll the closing costs into the loan, so they don’t incur these costs out of pocket.
Just remember that the more money that is rolled into the loan, the higher the loan amount, your
interest and monthly payments. You’ll save money over the life of the loan by paying these fees
upfront. After all is complete and keys have changed hands, you can breathe a sigh of relief as
you will officially be a homeowner. Welcome home!
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
Text or call phone: (502) 905-3708
email me at kentuckyloan@gmail.com
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people
