When someone borrows money from a bank to buy a home, refinance a mortgage loan, or take out a second mortgage loan, the bank may charge certain fees. The law requires the lender to tell the borrower about the lender’s requirements and fees before lending the money. In New Jersey the lender must tell the borrower:

• If the borrower must obtain a title insurance policy;
  
• To consult with an independent attorney to review the loan documents and assist with the closing of the loan; and
  
• If the lender’s attorney fee must be paid by the borrower;
  
  • The lender must provide an estimate of the attorney fees.
    
  • The lender’s attorney can only charge a fee to review loan documents submitted by the borrower’s attorney.

Points
"Points" or "discount points" are prepaid interest that a borrower may be charged on a mortgage loan. Points are paid by the borrower at the time of the closing of title and are a percentage of the loan amount.

A discount point is equal to one percent of the original loan amount.

• For example, two points on a $100,000 loan is $2,000.

Additional payment on principal
The borrower also has the right to make additional payments on the principal amount of the loan, without interest. These “principal payments” cannot total more than one-third of the original loan amount during any six-month period.