What Does a Loan Cost

An overview of home loan closing and how to avoid junk fees.

There are many services involved in processing a loan. The specific services and fees vary by type of loan, property, borrower and lender.

One-time Costs

Many closing costs are associated with analyzing the borrower and property, underwriting the loan, and providing title insurance, escrow and closing services, such as:

Lender/Broker loan fees and services:

Title, escrow and closing services:

If you are refinancing, your existing lender may charge:

Pre-paid Items

If your property insurance renewal or property taxes will be due soon, the lender may require those items to be paid current as part of closing your loan. These pre-paid expenses are not costs of obtaining the loan (you owe them whether or not you get a loan) but they will be included in the amount you must pay at the time of closing.

Another pre-paid item is the first month’s pro-rated interest on the new loan. If you are refinancing an existing loan, pro-rated interest on the old loan will be included, too.

Pre-paid expenses:

Get a Good-Faith Estimate

A Good-Faith Estimate is an detailed statement of the various fees for your loan. Carefully review the GFE and ask about any item of which you are unsure.

Steve Rumberg will automatically provide you with a Good-Faith Estimate before starting your loan and gladly answer any questions you have. He wants you to understand your loan so that you are knowledgable and satisfied.

What About Junk Fees?

Be aware that some brokers pad their profit with fees you don’t owe. To avoid junk fees, ask the loan officer to review the Good-Faith Estimate with you line by line. Steve Rumberg never charges junk fees and guarantees his Good-Faith Estimate in writing.

We don’t charge junk fees

What About "No-Cost" Loans?

Every lender incurs costs in providing a loan, the question is how those costs are covered:

All of these options are perfectly legitimate as long as you are aware of them. Just don’t be fooled into thinking that your "no cost" loan was free.

How Does the Mortgage Broker Get Paid?

The mortgage broker is usually compensated by the lender based on the loan amount and the interest rate. The borrower can also pay the broker directly in return for a lower rate, an option that makes sense if you plan to keep the loan long term. Steve will analyze the rate versus cost breakeven point for you and help you decide which option is best for you.

About Steve Rumberg

Steve Rumberg is a wholesale loan broker and believes in honest, up-front disclosure of all fees — exactly the way he himself wants to be treated. He never charges junk fees and guarantees that his Good-Faith Estimate is accurate.

Ready to start?

Steve is your single point of contact for the entire loan process, from application to funding, ensuring that you receive prompt, accurate service. Contact Steve now to get started.

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Direct: (408) 723-5200, Toll-free: 1(866) 597-3258 x 1100,