Mortgage Electronic Registration Systems, Inc. (MERS) is an American privately held corporation.[1] MERS is a separate and distinct corporation that serves as a nominee on mortgages after the turn of the century and is owned by holding company MERSCORP Holdings, Inc., which owns and operates an electronic registry known as the MERS system, which is designed to track servicing rights and ownership of mortgages in the United States. According to the Department of the Treasury, the Board of Governors of the Federal Reserve, The Federal Deposit Insurance Corporation and the Federal Housing Finance Agency, MERS is an agent for lenders without any reference to MERS as a principal.[2] On October 5, 2018, Intercontinental Exchange (NYSE: ICE) and MERS announced that ICE had acquired all of MERS

A seller concession is a portion of the buyer’s closing costs and prepaid expenses that the seller agrees to pay for, lowering the overall upfront costs for the buyer. Sometimes, buyers ask for concessions when the home inspection turns up an issue that needs to be remedied

The base loan amount equals the purchase price minus the down payment. The final loan amount adds the upfront MIP to the base loan amount.

When you refinance your mortgage, expect to pay a number of fees. A loan reconveyance fee is a typical charge when you refinance a mortgage, collected when you have a full reconveyance document prepared. A loan reconveyance fee covers the preparation of the reconveyance document that reassigns ownership back to you. The fee covers the cost of removing your current lender’s lien from your property title.

Hazard Insurance protects a homeowner against the costs of damage from fire, vandalism, smoke, and other causes. When you take out a mortgage, the lender will require you to take out hazard insurance to protect their investment; many lenders will incorporate the insurance payment into your monthly mortgage payment.

Real Estate property tax is a levy on property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state, a county/region, or a municipality. Multiple jurisdictions may tax the same property. Real property (also called real estate or realty) means the combination of land and improvements. Under a property tax system, the government requires and/or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value. Forms of property tax used vary among countries and jurisdictions.

There are certain items the lender may require you to pay at the time of closing or in advance of the actual closing date. These may include:  Interest – Lenders require payment of loan interest from the day of closing through the end of the month. Interest is accrued and paid as part of the monthly loan installments. Mortgage Insurance Premium – At closing, you may be required to pay your first year’s mortgage insurance premium, this fee is paid to a Private Mortgage Insurance Company. If the loan is being federally insured (FHA) or guaranteed (VA), the mortgage insurance or funding fees for those government loan programs would be charged at closing. Hazard Insurance Premium, “homeowner’s hazard insurance” lenders normally will require one year’s payment in advance, this policy protect the property from major damage. 

Flood Insurance, depending on the location of your home, flood insurance may be required and payment of the first year’s premium must be made in advance of closing. Real Estate property taxes, the lender will normally require two to three quarters paid upfront at closing, these Real Estate taxes are levy’s placed on the property that the owner is required to pay

These are deposits paid by the borrower to the lender for homeowners insurance, taxes, and sometimes mortgage insurance and assessments, these deposits are placed into an account called an escrow impound account.

• Estimated Prepaid Items/Reserves

These estimated prepaid items and reserves include taxes, insurance, and mortgage insurance, The number of months in reserves that is collected at closing will depend on what month it is, and where you fall in relation to the billing cycle associated with taxes, and insurance. An established impound account must have enough reserves in it to pay the bills when they come due. In addition borrowers should expect to pay home owners insurance and property taxes due inside of escrow if they are financing close to the end of the billing cycle. If you tax or insurance bill is due within three months expect to pay your taxes and insurance due inside of escrow when closing. The escrow and prepaid’s are considered items you would have to pay regardless of your refinance loan or whether you where purchasing.

• Closing costs are fees associated with the finalization of a real estate contract and the origination of a loan, and they can vary considerably, depending on the situation. In order for the deal to go through, the buyer must have these funds on hand at closing, when the change of ownership takes place. Estimated closing costs are provided by real estate professionals and lenders at the start of the escrow period to give buyers and sellers an idea of the closing costs they can expect with their particular real estate deal.

Private mortgage insurance (PMI) protects the lender in case the borrower defaults on his or her mortgage loan. Lenders generally require PMI when your down payment on a home is less than 20 percent of the home’s total value.

Items Payable in Connection with Loan: These are the fees that lenders charge to process, approve and make the mortgage loan.

A document preparation fee is charged by a lender or escrow company for preparing loan documents such as the mortgage, note and other legal disclosures.

Recording fee are paid to a government body which enters an official record of the change of ownership. Transfer Taxes, these are government charges based on the amount of the mortgage on the purchase of a home. Depending on your location, there could be a city, county or state tax involved, or some combination.

A real estate stamp tax fee, more commonly known as a real estate transfer tax, is a fee assessed during the transfer of real estate between two parties

Additional Settlement charges may cover a survey; a lender may require that a surveyor conduct a property survey. This is a protection to the buyer as well. Usually the buyer pays the surveyor’s fee, but sometimes this may be paid by the seller. A Pest Inspection, this fee is to cover inspections for termites or other pest infestation of your home. A Lead-Based Paint Inspections, this fee is to cover inspections or evaluations for lead-based paint hazard risk assessment.

This is prepaid interest and it’s normally collected by the lender to pay for the interest charges for the remainder of the month during the period which the loan closes escrow.

The VA Funding Fee is a set fee charged to each veteran who is closing a mortgage with the Veteran’s Administration. The fee varies based on the situation and the down payment on the loan itself.

Base Loan Amount is 96.5% Loan to Value on the purchase price of a home on an Federally Insured Mortgage ( FHA Financing) When multiplied by the lesser of sales price or appraised

Value, this determines the maximum Base Loan Amount (BLA), prior to including

the UFMIP – not to exceed FHA’s maximum county loan limit.

A loan that places a secondary or “junior” lien on property.