Final answer:
Loan closings may include discount points and interest rate adjustments as well as origination fees, but not typically warehousing fees. Discount points are upfront charges for a lower interest rate, and interest rate adjustments occur with ARMs, affecting the monthly payments.
Step-by-step explanation:
Loan closings differ from regular sale closings because they may contain features specific to the financing process, such as discount points and interest rate adjustments. Discount points are upfront fees paid to the lender at closing in exchange for a reduced interest rate on the mortgage. Interest rate adjustments are common with adjustable-rate mortgages (ARMs) where the interest rate changes over time based on market conditions.
Origination fees are charges by the lender for processing a new loan application and are typically included in loan closings as well. Warehousing fees are less common and relate to a short-term funding line to hold loans until they can be sold in the secondary market.
In sum, not every loan closing will include all of these features, but they are common in many mortgage loan transactions. Understanding these costs is crucial for borrowers as they can significantly affect the overall cost of the loan and the monthly payments.