Mortgage Basics · Know the costs
Mortgage fees & closing costs.
Know what you’re paying for.
See where the money goes.
A mortgage involves costs for the loan, the property, and closing. Use this guide to understand common charges and the questions to bring to your AMCFG loan officer.
01 / A reference you can use
What does each charge cover?
These are common categories, not an AMCFG price list. Your loan type, lender, property, and location determine which charges apply. Ask who receives each payment and whether it is refundable if the loan does not close.
- Origination, processing & underwriting
- Charges for arranging and reviewing the loan. Lenders and brokers may group or itemize them differently; compare the total.
- Credit report & verification
- Charges for obtaining credit information and other checks required for the loan.
- Appraisal
- Pays for an opinion of the property’s value. A home inspection evaluates condition and may be a separate expense.
- Title & settlement
- Title searches, insurance, and handling the closing. Lender’s title insurance protects the lender; owner’s coverage protects your ownership interest.
- Recording & transfer taxes
- Government charges for recording documents or transferring property. What applies and who pays depend on the location and transaction.
- Discount points
- An upfront charge for a lower interest rate. Compare the cost with the rate reduction and how long you expect to keep the loan.
- Mortgage insurance & program fees
- Some loans have upfront premiums, funding fees, or guarantee fees. These depend on the program and may be accompanied by ongoing charges.
02 / Keep the amounts distinct
Money due at closing can serve different purposes.
Down payment
Your contribution toward the purchase price. It is separate from the charges for obtaining the loan and completing the transaction.
Prepaid expenses
Amounts paid ahead of time, such as homeowners insurance and interest between closing and the end of the month. The closing date can affect prepaid interest.
Initial escrow deposit
Money reserved in an account for upcoming property-tax and insurance bills. These funds pay property expenses; they are not an extra origination fee.
03 / Buying a home
Build up to your cash to close.
Start with your down payment and closing costs. Then account for deposits already paid, allowable credits, and other adjustments. Some expenses, such as an inspection or appraisal, may be paid before closing; check how they are accounted for.
Hypothetical example · Not a quote
How the amounts fit together.
| Amount to account for | Illustration |
|---|---|
| Down payment | $20,000 |
| Loan & settlement charges, before credits | + $5,000 |
| Prepaids & initial escrow | + $2,000 |
| Deposit already paid | − $3,000 |
| Seller credit toward costs | − $1,000 |
| Remaining cash to close | $23,000 |
Assumes the seller credit is allowed and all charges are paid at closing except the deposit. No financed closing costs or other adjustments. Actual fees, credits, and cash requirements vary; these figures are not AMCFG charges or qualification requirements.
For most purchase mortgages, compare the Loan Estimate with the final Closing Disclosure. Your AMCFG loan officer can help you understand changes and the questions to resolve before signing.
Follow the Home Purchase guide04 / Replacing a mortgage
Decide how to pay the costs.
A refinance can involve origination, valuation, title, recording, and program charges again. Ask for an itemized estimate showing the current loan payoff, new costs, any credits, and the cash you bring or receive.
The payoff settles existing debt; it is separate from fees for the new loan. Ask whether new prepaid interest and escrow funds are needed, too.
- Pay from available cash
- Uses more money now and avoids adding those costs to the loan balance.
- Add eligible costs to the loan
- Reduces upfront cash needed, but increases the amount borrowed and the interest you may pay.
- Use a lender credit
- Offsets some closing costs, generally in exchange for a higher interest rate.
05 / Using home equity
Reverse-mortgage costs need their own review.
A Home Equity Conversion Mortgage, or HECM, is an FHA-insured reverse mortgage. The HECM costs below do not automatically apply to proprietary reverse mortgages, which have their own terms and are not FHA-insured.
HECM costs at the start
- Counseling
- HUD-approved counseling is required. The agency explains its fee and any available fee assistance.
- Origination & third parties
- Loan origination plus applicable appraisal, title, recording, and other settlement charges.
- Initial mortgage insurance
- An upfront premium for the FHA insurance on the HECM.
HECM costs over time
- Interest & mortgage insurance
- Ongoing charges are added to the balance; interest can accrue on previously added costs.
- Servicing
- A separate servicing fee may apply. Check the proposed loan’s terms.
- Property expenses
- You remain responsible for property taxes, insurance, and maintenance. Ask whether funds must be set aside for taxes and insurance.
A HECM for Purchase also requires funds to cover the purchase price and closing costs beyond the HECM proceeds. HUD: HECM for Purchase ↗
Reverse mortgages generally use a Good Faith Estimate and a HUD-1 settlement statement. Ask your loan officer to explain the disclosures for the specific product. CFPB: reverse-mortgage estimates ↗
Explore reverse-mortgage loan types06 / Before you decide
A few questions make the costs clearer.
Are all these charges paid to AMCFG?
No. A closing statement can include lender or broker charges, payments to service providers, government charges, and property expenses. Ask who receives each amount.
CFPB: closing charges & recipients ↗Which fees can I shop for or question?
Your Loan Estimate lists services you can shop for. Ask AMCFG which charges may be reduced, then compare the full offer.
CFPB: services you can shop for ↗Do lower estimated taxes or escrow mean a cheaper loan?
Different estimates may use different assumptions for the same future bills. Ask for consistent tax and insurance figures before comparing offers; a smaller estimate does not lower the bill itself.
CFPB: taxes, insurance & escrow ↗