The purpose of the appraisal fee is compensation for a professional, licensed appraiser to perform an appraisal on the property to verify that the property’s fair market value is equal to or greater than the asking sale price.

This fee is usually paid for by the buyer, though negotiations can end with the seller paying the fee, and is often required by lenders as a condition of the mortgage loan.

If you’ve ever purchased a home you’ve probably heard about points, whether you purchased them or not. For those that aren’t familiar with the practice of buying points on a mortgage, it’s money that the buyer gives to the lender as a form of up-front, pre-paid interest rate on the loan, with one point equaling one percent of the loan.

Purchasing points can be done for various reasons, including in an effort to lower the interest rate on the loan, or to have a lender agree to let you qualify for the loan. While lenders requiring the purchase of points is their way of protecting themselves, a buyer deciding to purchase points represents something of a gamble, with the buyer having to know there will come a point where the money they put in up front will be off-set by what they’re saving down the line with the lower interest rate.

Deciding to buy points on a house that you plan to quickly refinance or resell isn’t a wise choice as you’ll end up losing money in the long run, but it can be beneficial if you’re planning to have the house past the point where the costs off-set.

Closing costs, when paid, can go to a lot of different people and institutions. The mortgage application fee is one that goes from the buyer to the lender to cover the costs of processing the loan application for the house. In some cases this fee can be paid directly to the lender before entering into closing, though usually it is taken care of at closing.

If you have a zero closing cost mortgage, this fee could be waived, helping to lower your costs.