Each day I’ve been posting daily rates based upon a static scenario. The idea is to give consumers a anchor point to judge where the market is and whether or not they’ve got a fair deal.
Rates are a commodity, but they can’t be wholly separated from price. On my rate quotes I assume a closing cost figure of $3,900. That figures somewhat arbitrary, a SWAG if you will.
To ground my updates in reality I’m going to periodically post a break down of closing costs, and use the new figure for my daily updates.
The closing cost figure is based on a refinance scenario. I use this rather than a purchase scenario, because the costs tend to be higher. The reason they tend to be higher is that title fees on a purchase are bore by both the buyer and seller. i’ll include both scenarios here, but the daily posts will be for a refinance.
Final note, the scenario is a $250,000 loan, on a single family residence, with at least 20% equity, and a credit score above 740 (I’ve used 780 in my daily posts, but the breakpoint is 740).
Here’s the gross closing costs:
| Fee | Paid to | Refinance Fees | Purchase Fees |
| Origination fee | D. White & Co | 2,000.00 | 2,000.00 |
| Credit Report | Advantage Credit | 32.00 | 32.00 |
| Appraisal | TBD | 350.00 | 350.00 |
| Investor Fees | Amtrust Bank** | 705.00 | 705.00 |
| Flood Certificate | First American Flood Data | 11.00 | 11.00 |
| Loan Closing Fee | See note*** | 225.00 | 250.00 |
| RE Closing Fee | See note | - | 125.00 |
| Title Insurance | See note | 625.00 | 354.00 |
| Courier Fee | See note | 40.00 | 25.00 |
| Chain of Title | See note | 30.00 | |
| Edoc Fee | See note | 30.00 | |
| Release Processing Fee | See note | 25.00 | |
| Recording Fees | See note | 150.00 | 135.00 |
| State Tax Stamp | Colorado | 31.25 | |
| 4,138.00 | 4,103.25 |
Turns out my $3,900 was off by $238. Future rate posts will reflect the gross closing figure of $4,138.00
** Amtrust is my favorite investor. They have two junk fees that total $705.00. That’s about par for the course. The fees are named: Table Funding Fee and Admistrative Fee. The names don’t mean anything, they’re just a source of revenue. It’s par for the course in the mortgage industry
***The refinance is based upon title insurance provided by First Integrity Title. I like them, they’re reasonably priced. On purchases the buyer has little leverage to choose the title provider, which is selected by the seller’s real estate agent. For the purchase I used title insurance information from American Heritage Title, because I had a recent deal with them and this is what they charged. It’s kind of steep, but still cheaper than the refinance rates.
What is not included:
In real estate transactions there are charges called pre-paid finance charges. These costs include interest, hazard insurance, taxes, and mortgage insurance. These fees aren’t included here, for two reasons.
- First, I don’t know what they might be. Insurance and taxes are property specific as well as a function of the insurance agent the borrower has selected. The interest due at close is function of the point during the month the closing is set. I don’t know what any of these items will be and submit that they aren’t helpful because of, reason two.
- Second, since the insurance and taxes are a function of the property they are independent of the mortgage and will not change from one mortgage provider to the next. The interest may change based upon the rate, but the time of the month is an independent input.
Since these items are independent, they are often used to manipulate the estimate to make it look better. Recent reforms have not addressed this issue, because these items have little effect on the Truth in Lending.
Also not considered but again independent as far as shopping are the fees charged on the payoff of a refinance loan. These fees may cost as much as $100, but they’d be charged in every case so they don’t enlighten when it comes to shopping.
