Settlement Costs get Simple

Do you remember the last time you sat down at the escrow office to sign all the loan docs for your refinance? Do you remember the Estimated Closing Costs statement? How about the Good Faith Estimate of Closing Costs (Regulation Z)? Things are starting to get a little bit easier.

The Escrow/Title companies locally have come up with a “bundled services” method of pricing their services. This flat rate will include most, but not all, costs that escrow/title charges during the home loan process. No more line items of Escrow, Title insurance, courier fees, fax fees, doc prep fees, etc. It will be a lump sum cost that will be better to shop for the lowest fees. The thing to keep in mind is that this flat rate is the cost that the escrow company charges, not the lender or the broker, so you can’t just shop for escrow charges only. However, it will now be easier for you to call and get, and a broker/lender to deliver, a better estimate for closing costs so you won’t be ambushed in escrow with additional line item fees that may add up to several hundred dollars! Truthfully, this non-disclosure of fees was seldom the escrow companies’ fault. It was the loan officer’s fault for not properly preparing the Good faith estimate.

As always when you shop for your next home loan, call all the mortgage professionals you need to; but when you are comparing costs, make certain that you compare all the costs. If certain fees are excluded, or are included, ask what they are there or not there for.

Fixed Rates for conforming loans (under $359,650) as of 4/20/05 are:
(rates quoted are for 0 points)
30 year fixed: 5.625% (APR 5.702%) payments are $2,070.35/mo.
15 year fixed: 5.25% (APR 5.38%) payments are $2,891.15/mo.