Trust Deed:
Similar to a mortgage in that it is the document used as a guarantee to repay a loan on real estate.

Origination fee:
One percent of the loan amount is paid to the lender.

Discount points:
One point = one percent of loan amount. Points can be used to buy down the interest rate and charged to either buyer (prepaid interest) or seller.

Appraisal fee:
An independent, licensed third-party whose opinion of the property's worth which is demanded by the lender to substantiate the sales price.

Credit report:
A lender's fee to secure buyers’ credit reports from the three participating credit reporting companies.

Escrow fee:
Buyers’ and sellers’ shares of the escrow company's fees for performing third-party functions while finalizing (closing) the escrow.

Title insurance:
Seller in So CA usually pays a Title Co. to insure the transfer of a clear title (no liens, encumbrances, etc.) to the buyer.
Buyers purchase policy insures to the lender clear title to the property.

Recording fees:
Necessary fees to record the documents of ownership, etc.

Flood certificate:
Another necessary evil to prove to the lender the property is not sitting in a known flood zone - like a river bottom.

Tax service:
Another governmental fee.

Processing fee:
The cost of preparing a loan for “final approval by a Mortgage Underwriter.”

Administrative fee on 1st and 2nd TDs:
The same as the processing fee.

Wire fee:
Cost to transfer funds from the lender’s bank to the escrow company’s so they can accomplish their job of paying (disbursing) all those involved in the transaction.

Prepaid Impound Charges: (Interest is always paid in arrears.)
Monies collected by the lender to hold in buyers’ non-interest-bearing account to accommodate future tax and insurance premium payments.

Prepaid TD interest:
Prorata cost if loan closes into (after) the beginning of the month.

Hazard (Fire) insurance:
Lender only requires the basic fire insurance to insure their interest. The first year's policy must be paid upfront to a company of buyers’ choosing. A Homeowner's Policy is in addition to the basic and of buyers’ choice.

Property tax and insurance prorations:
Buyers must repay to the seller any taxes seller has already paid up until the date of transfer (close of escrow). Buyers are obliged to create an impound balance, if requested by lender. (Six months is a good average.)

Seller credit (NRCCs):
Seller can, if he chooses, assist the buyer to purchase by paying the Non-Recurring Closing Costs listed above which the buyer pays once - at the time of purchase. i.e. title insurance, appraisal fee, recording fees, etc.

Lender credit:
Lender may monetarily assist with buyer's costs by then offsetting them with a higher interest rate.

MONTHLY PAYMENT:
Principal and Interest payment at stated rate (called P.I.)

Property Taxes (1.25% of the sales price, paid in two installments (June and December yearly) One-twelfth (1/12) of the yearly taxes which is paid into impound account held by lender) (called T.)

One-twelfth of the estimated yearly hazard (fire, etc.) insurance, into impound account (called I.)

2nd and/or Homeowners’ Association (HOA) Dues

TOTAL = PITI, p.i.t.i. or simply - piti