After the big real estate price drop that began in 2008, lenders have instituted new, stricter loan approval conditions on borrowers. Gone are the days of no-income verification, bad credit, and 100 percent loan-to-value loan approvals. On average, loans now take longer to fund. In prior years, loans often closed within 30 days. Now it usually takes between 45 and 60 days.

With the new stricter approvals, most lenders have also instituted pricing adjustments that affect the borrower’s loan costs. These adjustments affect the cost, not the rate of a mortgage. For example, a loan at 5 percent interest might cost one loan origination point (1%). However, if the borrowers don’t set up an impound account with the loan to pay for taxes and insurance, the loan origination cost will rise by .25 percent and the loan fee will become 1.25 percent.

Here are the seven major items that will affect the cost of your mortgage. These additions to cost are estimates. Each lender’s adjustments to fees will vary. (You should note that 1 point equals 1 percent. If a $100,000 loan costs 1 point, this will mean a cost of $1,000.)

1. Credit Scores

When you get a home loan, lenders will always run a 3-bureau credit report. This is simply a collection of the three main reporting bureaus combined into one report. When complete, lenders will take the score in the middle called the mid-range score. If the mid-range score is less than 660, but no lower than 620 the loan will have a price adjustment of .25 percent. This simply means that instead of the loan costing 1 point, it will now cost 1.25 points.

2. No Impounds

Lenders prefer to have borrowers set up an impound account to pay for property taxes and homeowners insurance. This gives the lender a bit more security because they know that the taxes and insurance will both be paid on time. If a borrower decides to not set up an impound account, it will cost an extra .25 percent. Again, instead of the loan costing 1 point, it will now cost 1.25 points.

3. Cash Out

If the loan is a refinance and the borrower elects to pull more money out of the house over and above the existing loan balance, a lender will charge an additional point. This means instead of the loan costing 1 point, it will now cost 2 points.

4. 2-4 Units

Most loans are based on single family residences. If the loan is for multiple units such as a duplex, triplex, or fourplex, the lender will charge an extra 1.75 points. On a $400,000 duplex, this extra cost would be $7,000 ($400,000 times .0175.)

5. Manufactured Home

Most loan quotes are based on a single family residence on a permanent foundation. If the home is a manufactured home that has been placed on a permanent foundation, most lenders will charge an extra 1 point to do the loan.

6. Loan Lock Extensions

When borrowers start a loan, a lock is usually issued for either 30 or 45 days. This lock assures that the borrower will get the rate they were quoted as long as the loan closes within the lock period. If the loan will take longer than the original lock period, it might be advantageous for the borrower to extend the rate lock particularly if interest rates have gone up during the loan process. Most lenders will extend a rate lock for an additional two weeks, but it will cost an extra .25 percent.

7. Interest Only

Most conventional loans now have an option to be paid back with just interest, instead of principle and interest. For example, a $100,000 30-year loan at 5.5 percent interest would have principle and interest payments of $567.79. This means the loan would be paid off in 30 years. Some borrowers can lower their payment by just paying interest instead of principle AND interest. A $100,000 loan at 5.5 percent with just interest payments would have a monthly payment of $416. To do this, lenders will charge an extra .25 point.

Get Additions to the Cost Up-Front

When you initially sit down with a lender, you should find out if any of these additional costs apply to your loan.