Loan Closing Costs

Customers Want To Know The Costs Associated With A Loan, What Can I Tell Them?

In addition to the interest rate associated with the loan product, you can use the following guidelines to give your customer an expectation of the total cost of the loan:

  1. Origination fees – This fee is negotiated by DS Independent Agents and can be between 1% and 2% of the loan amount. AGRIfinancial will retain the first .50% of the fee, and the agent will retain the remainder of the fee. The size and complexity of the loan and market competition often dictate what level of fee can be charged. The minimum fee charged for a loan is $2500. AFS receives $1250 of the minimum origination fee with the DS agent receiving the other portion of the fee.
  2. Appraisal fee – This charge will vary depending upon the appraiser, the number of acres, amount of improvements on the property, and proximity of the land being used as collateral and comparative sales. Appraisals for a “typical” farm would run between $500-$1000. Larger acreages are more expensive to appraise, as are tracts will multiple facilities and improvements. The appraisal fee is a direct charge passed on to the appraiser.
  3. Title Insurance - This charge is determined by the attorney or firm issuing the policy. Here is a scale that you can use to estimate the cost:
  4. Title Insurance policy

    Estimated at $2.00 - $5.00 per thousand

    Closing or escrow fees

    $200

    Recording fees

    $100

    UCC Search w/copies

    $100

  5. Title Review and document preparation – These charges are associated with work necessary to prepare an accurate closing package.
    Individual - $500
    Corporations - $1000
  6. Additional settlement charges associated with a loan:
    Credit report: Individual - $50
    Corporations - $150
    Flood determination/Life of Loan – per improved parcel       $25
    Tax service fee - $65
    Overnight mail and other fees associated with handling the loan $50
  7. Excess servicing - Loans have an ongoing cost of servicing. DS Independent agents may add up to 75 basis points (.75%) to the interest rate on farm loans to compensate for that servicing cost. When a customer makes an annual or semi-annual payment, AGRIfinancial will pay the DS Agent the equivalent of .75%. This fee is paid out to you over the life of the loan.

NOTE: Agents directly employed by Diversified Services do not have to negotiate origination fees or excess servicing fees. A standard commission of .25% of the loan amount will be paid directly to you upon the loan closing. This has been a position adopted by Diversified Service to establish consistency among all of its employed agents.