Mortgage Closing Question - Junk Fees?

[mom2alix]

Any mortgage experts out there?

We're thinking of refinancing our mortgage since the rates are so good right now (and possibly getting better). For background, this is a straight refinance, not taking out any equity, conforming fixed rate loan. I just got a good faith estimate and most of the fees look to be in line, except in the Title Charges area:

Closing or Escros Fee 550.00
Title Insurance 411.00
Title Update 1000.00

I don't think that Title Update fee makes sense, and these title fees are DOUBLE the amount of the title fees for both us and the seller when we originally bought the house 5 years ago. Is my instinct correct on this or am I way off base? Any advice appreciated. Thanks!

 

[bettyann29]

you might even go over to creditboards dot com .. there is a mortgage board there and alot of experts over there..

 

[MN_Gal]

I used to work for a Title Company, and for a refi, we didn't have to update the title (abstract). We had to run a title check, but when the Title Opinion & Title Insurance were written, they just used the last Title Opinion and checked it against the new title check to check for any new liens, mortgages, etc.

Each bank may be different in what they require to insure the loan though.

 

[jakenjess]

We're in the process of refinancing now, and the only fee I see related to title is title insurance of $505. Title exam and title search are $0. But as the PP said, different banks may have different requirements.

 

[Makdyn]

Those are most likely the title attnoreys fees. Which is highly unlikely to change as the bank, lender, or broker does not have the right to change them. The fees are set by the closing attorney that they use.

 

[Manda]

I'm looking at my good faith estimate on my refi right now.

Closing/Escrow Fee 130.00
Title Insurance 295.00

There is no title update fee. And the mortgage guy is paying the other fees for me any way, so it really doesn't matter to me either way since I'm not paying it. =)

 

[Muushka]

Our mortgage company just offered (second time) to lower our interest rate from 5.875% to 5.25% for no fees whatsoever. We did it 3 years ago (from 6.125 to 5.875) and there were no fees then.

Not sure how low you are trying to get, but perhaps your mortgage company has a similar deal. I just happened to be looking up our mortgage on the internet and found the deal.

 

[seashoreCM]

Shop around.

You may find a lower title update fee somewhere else, although there may be other fees or other higher fees.

When a bank or mortgage company offers low or no overt closing costs, the closing costs are still there, worked into the interest rate.

I'm not sure what a title update fee does but my gut feeling suggests that $1000. is on the high side.

If you have the time, go to the county registry of deeds aka bureau of conveyances/public records and find out what it costs to "record" a document, both now and for selected times over the past several years. Some states and counties have upped these fees recently, and every mortgage loan involves such recording.

Disney hints: http://members.aol.com/ajaynejr/disney.htm

 

[Darcy03231]

I work for a law office that does real estate closings:

Title Insurance: Check to see if its both owners and lenders coverage. If you previously bought owners coverage you don't need to buy it again. Once you've bought it once it will cover you for as long as you own the house. You'll only need to buy lenders for the new lender.

Escrow Fees: It sounds like you escrow your real estate taxes and or/homeowners insurance. The lender will require you to fund the escrow account, usually by 2-3 months payments. The good news is if you escrowed with your old lender once the loan is paid off you will receive a check in the mail for whatever you had in escrow.

Title Update: Sounds high to me. We update titles for anywhere between $200-$300 depending on how complicated the title is and whether it is in county or out of county. I would check to see if this figure also includes the attorney's fees for closing which is an additional $600-750, again depending on if the closing takes place in our office or if we're required to close out of county.

Hope this helps.

 

[mom2alix]

A little more information. I pulled the documentation from when we bought the house and there was no Title Update fee required then, so I think this is a bogus charge. Also, it is with our current lender, so it's not like they don't already have the info. I completely understand needing a title search and title insurance to make sure nothing has changed, but I think this fee is just a way for them to get more money out of us. I make just go shop around.

 

[Muushka]

A little more information. I pulled the documentation from when we bought the house and there was no Title Update fee required then, so I think this is a bogus charge. Also, it is with our current lender, so it's not like they don't already have the info. I completely understand needing a title search and title insurance to make sure nothing has changed, but I think this fee is just a way for them to get more money out of us. I make just go shop around.

It's with your current lender? See my post above. What is your old rate and what rate are you looking to drop down to?

 

[mom2alix]

It was a bogus charge. I finally got a call back from the loan processor and she didn't know why "the system" had put that charge in. She said she didn't read over the GFE before she mailed it out since it auto-populates through their computer. Anyway, I'm not sure about all that (not really good for customer satisfaction) - BUT the actual fees I will see at closing are supposed to be:

Closing or Escrow Fee - $375
Title Insurance - $350

That is much more in line with what we've paid before for closing when we purchased the home. I am left wondering what fees I might have seen if I hadn't questioned them about this? Now all I have to watch is that the final docs match what I've been told. Thanks for your input, I was glad I called to question this!

 

[mom2alix]

It's with your current lender? See my post above. What is your old rate and what rate are you looking to drop down to?

We were at a 6.5 and dropping to a 5.875.

 

[Muushka]

We were at a 6.5 and dropping to a 5.875.

Wow. If you compare that to the deal my mortgage company is giving (5.875 down to 5.25) seems like they should help you out a little more than that.