At settlement time you will see many different fees on your settlement papers. You may not understand some of these fees, so here's an explanation for many of them.

• The Loan Origination fee is usually known as a loan origination fee but sometimes is called a "point" or "points." It covers the lender's administrative costs in processing the loan. Often expressed as a percentage of the loan, the fee will vary among lenders. Generally, the buyer pays the fee, unless otherwise negotiated.
• The Loan Discount Fee, sometimes called "points" or "discount points," a loan discount is a one-time charge imposed by the lender or broker to lower the rate at which the lender or broker would otherwise offer the loan to you. Each "point" is equal to one percent of the mortgage amount. For example, if a lender charges two points on a $80,000 loan this amounts to a charge of $1,600.
• The Appraisal Fee is the charge to pay for an appraisal of home value made by an appraiser.
• The Credit Report fee covers the cost of a credit report, which shows your credit history. The lender uses the information in a credit report to help decide whether or not to approve your loan and how much money to lend you.
• The Lender's Inspection fee covers inspections of the house made by employees of your lender or by an outside inspector.
• The Mortgage Insurance Application fee covers the processing of an application for mortgage insurance.
• The Assumption Fee is a fee charged when a buyer "assumes" or takes over the duty to pay the seller’s existing mortgage loan.

These are just a few of the fees charged at settlement time. Remember, you can shop among different settlement companies to find the lowest fees with the coverage you need.