First-time home buyers looking for mortgage loans for nurses are often shocked when they see the list of closing fees they must pay when buying their home. Some of these fees are paid to the mortgage lender while others are payable to different parties.

Closing costs are a significant part of purchasing a mortgage loan, and you should budget for them ahead of time. Here are the basics on what you will be expected to pay:

The Application Fee
This fee is charged when you first apply for your mortgage loan and is non-refundable. It covers the mortgage lender’s costs of completing your initial paperwork and perhaps even pre approving you for a certain amount.

Loan Origination Fee
This fee is charged by your lenders to cover all of the administrative costs they incur in processing your loan. It is generally charged as a number of ”points”. One point equals one percent of the amount you borrow. So if you are borrowing $200,000, one point is $2,000.

Interest rates are higher on loans that don’t have points. In addition, sometimes it will make sense to pay extra points to have the interest rate lowered.

Title Insurance
This insurance generally costs several hundred dollars. It is necessary to protect both you and the lender in case the person selling you the home does not legally own it. For instance, there could be a lien on the home or another owner that is not present or aware that the home is being sold.

Appraisal Fee
Your lender will require an appraisal of the home before funding your mortgage. They want to be sure that the house is valued at the price you have agreed to pay. Home appraisals general cost a few hundred dollars.

Home Inspection Fee
This is optional, but almost always a good idea. You’ll need to have this done on your own. You’ll want your new home to be inspected by a licensed home inspector. So that you don’t have any new homeowner surprises, you’ll want to know if there are any major problems with the home before signing the paperwork.

Attorney Fees
If you are hiring an attorney’s services there wil be a fee, usually several hundred dollars.

Homeowners Insurance
Most lenders now ask that you prepay the first year’s homeowners insurance at closing.

Private Mortgage Insurance (PMI)
If your down payment is less than twenty percent of the purchase price you will be required to pay private mortgage insurance (PMI). This insurance protects the lender in the event that you default on the loan, but it is an extra expense that you want to avoid if possible. You’ll be required to prepay a portion of this at your closing.

Prepaid Loan Interest
This cost covers the amount of interest that accrues from the time your mortgage is funded until you make your first payment.

Other Fees
You can most likely expect to see various other fees such as messenger fees, recording fees, and notary fees. These are all common fees that come with the cost of a mortgage.