There are many fees associated with the purchase of a home. Some of these expenses are generally lumped together and referred to as closing costs. These costs are paid when the homebuyer and I the seller meet to close the transaction. Generally, homebuyers pay settlement costs that are 2 to 3 per- cent of the house price. This would be in addition to"points" paid for the mortgage.

How and what fees are charged varies from lender to lender. Many lenders only require pay-ment of credit report and appraisal fees during the mortgage process. Other lenders don't charge these fees until the closing meeting. If you get an FHA- insured loan, part of the fees can be financed in the mortgage—check with your lender for details, as the guidelines for the amount will vary depending onyour loan.

The costs involved with a mortgage include thefollowing:

• Origination fee. This is a fee for the work involved in the evaluation, preparation, andsubmission of a loan application. That is, thefee is paid to the lender for creating the loan.The origination fee is usually stated in theform of points.

• Mortgage insurance application fee. This fee covers the processing of an application formortgage insurance (if applicable). This is usually a flat fee of between $250 and $400.

• Points. The lender may charge a certain number of points for the mortgage or for a discounted interest rate. Each point is 1 percentof the loan amount. Most lenders charge 1, 2,or 3 points. Often borrowers are given theoption of including these points in their mortgages. However, this raises the annual percent-age rate (APR) of the mortgage, making it more costly. For example, a $100,000 mort-gage, with 2 points at 7 percent for 30 years,has an APR of 7.197 percent. If the borrowerpays the points up front, the APR drops to 7percent.

• Processing, underwriting, and document fees. These are the fees for processing the loan documentation, analyzing risk, and determining an appropriate charge for taking the risk. It involves a review of a borrower's credit, valueof security, and certain legal documents.

• Appraisal and credit report fees. These are charges for an estimate of value of the house you are purchasing, supported by factual data by a qualified person, and fees for a detailed financial history of a person used by a lender to determine whether to extend credit.

• Tide, escrow, and closing agent fees. These are the county registrar's recording fees and fees to a third party for acting as the agent for a buyer and a seller of real estate. The responsibilities include handling of paperwork and disbursement of funds.

• Private mortgage insurance (if applicable). Mortgage insurance is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require mortgage insurance for a loan with a loan-to-value percentage in excess of 80 percent.

• Property and hazard insurance. This is often a multiple-peril policy that includes hazard insurance, theft, injury to others, and damages to another's property.

• Prepaid interest. Lenders often require the first month's interest to be prepaid at the time of closing.

• Incidental recording, delivery, wire fees, etc. These miscellaneous fees are paid by the bor-rower. Generally, they are the shipping and handling costs for the transport of documents from one entity to another, etc.

Many online lenders charge fewer points, have different interest rates, or charge lower origination fees for online borrowers. How much vou save on these three costs varies from lender to lender. Often borrowers can save 1 percent of the loan amount by applying online. For example, if the loan amount is$350,000, you can save $3,500—a significant amount of money for individuals of all income levels. Here are a few examples of the different ways online lenders pass on cost savings to borrowers:

At Countrywide (www.countrywide.com), if you use the Gold Credit Program, you'll save .75 to 1.25 of the loan points.E-LOAN (www.eloan.com) claims it can save you 80 percent of your loan fees.Mortgage.com (www.mortgage.com), claims that if interest rates maintain an all-time low, consumers can save as much as$1,500 in application and closing fees by shopping for mortgages online.