Closing Costs

Closing Costs

This skill provides itemized estimated closing costs for refinance transactions. Use it to calculate and present state-specific, product-specific fee breakdowns based on the borrower's property state, loan amount, and product type (Conventional, FHA, VA).

Scope: Refinance transactions only. Purchase transactions are not supported in this phase.

Licensed states: Georgia (GA), Alabama (AL), Florida (FL), Kentucky (KY), North Carolina (NC), Oregon (OR), South Carolina (SC), Tennessee (TN), Texas (TX), Utah (UT).

Products: Conventional, FHA, FHA Streamline, VA IRRRL, VA Cash-Out.

Integration: This skill is referenced by the mortgage-loan-officer skill when presenting closing cost estimates as part of a refinance quote.

Required inputs from the conversation:

1. Property state
2. Loan amount
3. Product type (Conventional, FHA, or VA)
4. For VA loans only: the vaFundingFeeType ('firstTime', 'subsequent', or 'exempt')
5. For FHA Streamline: borrower's mortgage statement (for UPB, current rate, origination date, monthly MIP)
6. For VA IRRRL: borrower's mortgage statement (for UPB, current rate, origination date/first payment date)

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Section A -- Lender Fees (All States, All Products)

Fee	Amount
Underwriting fee	$1,290
Discount points	Per rate selection (from pricer response) -- $0 if no points

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Section B -- Third-Party Fees (All States, All Products)

Fee	Amount
Credit report	$150
Appraisal	$550
Flood certification	$8
Tax service fee	$85

Section B total: $793

FHA Streamline and VA IRRRL exception: No appraisal is required for FHA Streamline or VA IRRRL refinances. For these products, remove the $550 appraisal fee.

Fee	Amount
Credit report	$150
Flood certification	$8
Tax service fee	$85

Section B total (FHA Streamline / VA IRRRL): $243

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Product-Specific Fees

Conventional

No additional product-specific closing cost fees.

Note on mortgage insurance: For conventional loans with LTV > 80%, the pricer returns conventionalMI with a monthly premium (monthlyMI on each rate option). This is an ongoing monthly cost, NOT a closing cost. Do NOT include conventional MI in the closing cost total. Present it separately as part of the monthly payment breakdown: "Monthly MI: $XXX/mo (drops off when LTV reaches 80%)".

FHA -- Upfront Mortgage Insurance Premium (UFMIP)

• Amount: 1.75% of the base loan amount
• This fee is typically financed into the loan (added to the loan balance), not paid out of pocket
• Present as: "FHA Upfront MIP: $X (typically financed into the loan -- not paid out of pocket)"
• Example: $300,000 loan x 1.75% = $5,250 financed

Integration note: The pricer returns financedFees.ufmip for FHA loans. Use this exact amount rather than recalculating 1.75% manually. The pricer also returns monthlyMip on each rate option — use this for the monthly MIP line item.

FHA Streamline -- UFMIP with Refund Netting

FHA Streamline refinances are FHA-to-FHA only (non-credit qualifying). The new UFMIP is 1.75% of the base mortgage amount, but the borrower may receive a partial refund of the UFMIP paid on the existing FHA loan, which is netted against the new UFMIP.

UFMIP Refund Calculation:

1. Determine monthsSinceEndorsement: the number of full months from the existing loan's origination date (endorsement date) to today.
2. Calculate refund percentage:
   • If monthsSinceEndorsement > 36: refundPercent = 0% (no refund)
   • If monthsSinceEndorsement <= 36: refundPercent = 82 - (2 * monthsSinceEndorsement), minimum 10%
   • Earliest streamline is month 7 (68% refund)
3. Calculate UFMIP refund amount: ufmipRefundAmount = originalUFMIP * (refundPercent / 100)
4. Net the refund against the new UFMIP:
   • ufmipRefundCredit = min(ufmipRefundAmount, newUFMIP)
   • If the refund exceeds the new UFMIP, the excess is refunded directly to the borrower by HUD (not applied to the loan)
   • netUFMIP = newUFMIP - ufmipRefundCredit

Refund schedule reference (months since endorsement → refund percent):

Month	Refund %	Month	Refund %	Month	Refund %
1	80%	13	56%	25	32%
2	78%	14	54%	26	30%
3	76%	15	52%	27	28%
4	74%	16	50%	28	26%
5	72%	17	48%	29	24%
6	70%	18	46%	30	22%
7	68%	19	44%	31	20%
8	66%	20	42%	32	18%
9	64%	21	40%	33	16%
10	62%	22	38%	34	14%
11	60%	23	36%	35	12%
12	58%	24	34%	36	10%
>36	0%

Present as: "FHA Upfront MIP: $X (new UFMIP) minus $Y (refund credit from existing UFMIP) = $Z net UFMIP (financed into the loan)"

FHA Streamline Max Loan Amount (HUD 4000.1 Streamline Worksheet):

The max loan amount for an FHA Streamline is calculated as follows:

1. Calculate Outstanding Principal Balance (OPB):

   • calculatedOPB = currentUPB + interestCharge + proratedMIP
   • interestCharge = one month's interest on the UPB (non-delinquent interest only)
   • proratedMIP = up to 2 months of monthly MIP (prorated from last paid-through date)
   • CANNOT include: delinquent interest, late charges, escrow shortages

2. Calculate Base Mortgage:

   • baseMortgage = calculatedOPB - ufmipRefundCredit

3. Calculate New UFMIP:

   • newUFMIP = baseMortgage * 0.0175

4. Calculate Total Mortgage:

   • totalMortgage = baseMortgage + newUFMIP

5. County Loan Limit Check:

   • If totalMortgage > countyFHALoanLimit: maxLoan = min(countyFHALoanLimit, originalPrincipalBalance)
   • Otherwise: maxLoan = totalMortgage

FHA Streamline Closing Costs -- CANNOT Be Financed:

Unlike standard FHA refinances, closing costs on FHA Streamline refinances CANNOT be rolled into the loan. They must be paid either:

• Out of pocket by the borrower, OR
• Via lender credit (premium pricing -- pricing at a slightly above-market rate to generate a lender credit that covers closing costs)

Most FHA Streamline borrowers prefer $0 or minimal cash to close. When presenting FHA Streamline quotes, prioritize rate options that generate enough lender credit to cover the estimated closing costs.

VA -- Funding Fee

Check the vaFundingFeeType from the scenario context (collected during the borrower interview in the refi-quote workflow, Section 1.3.3.1). This field is set during Phase 1 data collection — do not ask the borrower again.

Funding fee rates:

• If vaFundingFeeType: 'exempt': Funding fee = $0
• If VA IRRRL (rateTermRefi): Funding fee = 0.5% of loan amount (financed), unless exempt
• If VA cash-out and vaFundingFeeType: 'firstTime': Funding fee = 2.15% of loan amount (financed)
• If VA cash-out and vaFundingFeeType: 'subsequent': Funding fee = 3.3% of loan amount (financed)
• Present as: "VA Funding Fee: $X (typically financed into the loan -- not paid out of pocket)"

Integration note: The pricer returns financedFees.vaFundingFee for all VA loans — use this exact amount rather than recalculating the percentage. When exempt, the pricer returns vaFundingFee: 0 and totalFinanced: 0. The vaFundingFeeType field is a pricer input — the closing costs skill should read it from the scenario context rather than asking the borrower separately.

VA IRRRL Closing Costs -- CAN Be Financed:

Unlike FHA Streamline refinances, closing costs on VA IRRRL refinances CAN be financed into the new loan amount.

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State Fee Schedules

Each state schedule below contains:

• Section C: Settlement/closing fee, Closing Protection Letter (CPL), lender's title insurance
• Section E: Recording fees, state-specific taxes

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Georgia (GA)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$675
Closing Protection Letter (CPL)	$50
Lender's title insurance	See formula below

GA Lender's Title Insurance -- Basic Loan Policy (CTICGA rates, effective 3/1/2024):

Loan Amount Range	Rate
$0 -- $50,000	$200 minimum
$50,001 -- $100,000	$200 + $4.00 per $1,000 over $50,000
$100,001 -- $500,000	$400 + $3.30 per $1,000 over $100,000
$500,001+	$1,720 + $2.95 per $1,000 over $500,000

Calculate in brackets -- each tier applies only to the amount within that range.

Section E -- Recording and Taxes

Fee	Amount
Georgia Intangible Tax	$3.00 per $1,000 of new loan amount
GRMA	$10
Recording	$60

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Alabama (AL)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$600 (estimate)
CPL	$25
Lender's title insurance	~0.5% of loan amount (filed rates vary by underwriter; use 0.5% as estimate)

Note: Alabama is a filed-rate state. Exact bracket schedules vary by underwriter. The 0.5% estimate with a 30% reissue discount for refinances is the industry norm.

Reissue discount: 30-40% off base rate when prior policy exists (automatic for refinances).

Section E -- Recording and Taxes

Fee	Amount
Mortgage recordation tax	$1.50 per $1,000 of new loan amount ($0.15 per $100)
Recording fees	$75 (estimate; varies by county)

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Florida (FL)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$750
CPL	$45
Lender's title insurance	See formula below

FL Lender's Title Insurance -- Promulgated Rates (standalone loan policy, no simultaneous issue):

Loan Amount Range	Rate per $1,000
$0 -- $100,000	$5.75
$100,001 -- $1,000,000	$5.00

Minimum premium: $100. Calculate in brackets -- each tier applies only to the amount within that range.

Reissue rate (if prior policy exists -- no expiration on eligibility):

Loan Amount Range	Reissue Rate per $1,000
$0 -- $100,000	$3.30
$100,001 -- $1,000,000	$3.00

Any amount exceeding the prior policy amount is charged at the full basic rate.

Section E -- Recording and Taxes

Fee	Amount
Documentary stamp tax	$3.50 per $1,000 of new loan amount
Intangible tax	$2.00 per $1,000 of new loan amount
Recording fees	$175 (estimate; $10 first page + $8.50/additional)

Combined FL state taxes: $5.50 per $1,000 of loan amount. This applies to the full new loan amount for refinances with a new lender (which is the standard case for broker-originated refinances).

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Kentucky (KY)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$450
CPL	$50
Lender's title insurance	See formula below

KY Lender's Title Insurance -- Filed Rates (Stewart, effective 3/3/2023):

Loan Amount Range	Rate
$0 -- $100,000	$500 flat
$100,001 -- $300,000	$500 + $3.85 per $1,000 over $100,000
$300,001 -- $1,000,000	$1,270 + $2.00 per $1,000 over $300,000

Reissue/refinance rate: 70% of standard rate (30% discount). Applies when borrower is refinancing an existing loan.

Section E -- Recording and Taxes

Fee	Amount
Transfer/mortgage tax	$0 (not applicable on refinance)
Recording fees	$100 (estimate; $46 base most counties + per-page charges)

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North Carolina (NC)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement/attorney fee	$900 (NC is attorney-closing state; includes title search)
CPL	$25
Title commitment fee	$16.50
Lender's title insurance	See formula below

NC Lender's Title Insurance -- State-Filed Uniform Rates (effective 10/1/2025):

Loan Amount Range	Rate per $1,000
$0 -- $100,000	$2.78
$100,001 -- $500,000	$2.17
$500,001 -- $2,000,000	$1.41

Minimum premium: $56. Calculate in brackets -- each tier applies only to the amount within that range.

Reissue rate: 50% of regular rate if prior policy exists within 15 years. Applies up to the prior policy amount; any excess at full rate.

Section E -- Recording and Taxes

Fee	Amount
Excise tax / revenue stamps	$0 (exempt on refinance -- DOT is not a conveyance)
Recording -- deed of trust	$64 flat

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Oregon (OR)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement/escrow fee	$600 (estimate)
CPL	$35
Lender's title insurance	See table below

OR Lender's Title Insurance -- OTIRO Rates (table-based, effective 9/4/2023):

Loan Amount	Standard Premium
$100,000	$500
$150,000	$625
$200,000	$750
$250,000	$875
$300,000	$975
$400,000	$1,150
$500,000	$1,350

For amounts between table values, interpolate linearly. For amounts over $500,000, use approximately $2.50-$3.50 per additional $1,000.

Substitution rate (refinance discount): ~70-75% of standard rate when replacing an existing loan policy on the same property.

Section E -- Recording and Taxes

Fee	Amount
Mortgage/transfer tax	$0 (Oregon has no mortgage recording tax)
Recording -- trust deed	$175 (estimate; $86-$93 first page + $5/additional page, varies by county)

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South Carolina (SC)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement/attorney fee	$750 (SC is attorney-closing state)
CPL	$35
Lender's title insurance	See formula below

SC Lender's Title Insurance -- Filed Rates (WFG schedule):

Loan Amount Range	Rate per $1,000
$0 -- $50,000	$4.32
$50,001 -- $100,000	$3.60
$100,001 -- $500,000	$2.52
$500,001+	$2.16

Calculate in brackets -- each tier applies only to the amount within that range.

Reissue rate: 50% of base premium if prior policy exists within 10 years. Prior policy must be furnished.

Section E -- Recording and Taxes

Fee	Amount
Deed recording fee / transfer tax	$0 (not applicable on refinance)
Recording -- deed of trust	$25
Recording -- release of prior mortgage	$25

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Tennessee (TN)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$550
CPL	$25
Lender's title insurance	See formula below

TN Lender's Title Insurance -- Filed Rates:

Loan Amount Range	Rate per $1,000
$0 -- $50,000	$2.50
$50,001 -- $100,000	$2.00
$100,001 -- $500,000	$1.75
$500,001+	$1.50

Minimum premium: $25. Calculate in brackets -- each tier applies only to the amount within that range.

Reissue rate (by age of prior policy):

• 3-4 years: 40% of original rate
• 4-5 years: 50% of original rate
• 5-10 years: 60% of original rate
• Over 10 years: 100% (no discount)

Section E -- Recording and Taxes

Fee	Amount
Tennessee indebtedness (mortgage) tax	$1.15 per $1,000 of new loan amount (first $2,000 exempt)
Recording -- deed of trust	$80 (estimate; $12 base + $5/page for ~15 pages + $1 register fee)

Formula for TN mortgage tax: (loanAmount - 2000) / 100 * 0.115

Quick approximation: loanAmount * 0.00115

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Texas (TX)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$500
CPL (Insured Closing Letter)	$25
Lender's title insurance	See formula below

TX Lender's Title Insurance -- TDI Promulgated Rates (effective 3/1/2026, -6.2% from 2019):

For loan amounts over $100,000:

basicPremium2019 = (loanAmount - 100000) * 0.00527 + 832
premium2026 = basicPremium2019 * 0.938

For loan amounts $100,000 and under: $832 * 0.938 = $780.42 (use $780)

R-8 Refinance Credit:

• Prior loan policy within 0-4 years: 50% credit off basic premium
• Prior loan policy within 4-8 years: 25% credit off basic premium
• Prior loan policy over 8 years: no credit

Section E -- Recording and Taxes

Fee	Amount
Mortgage/transfer tax	$0 (Texas has no mortgage recording tax)
Recording -- deed of trust	$75 (estimate; $25 first page + $4/additional page)

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Utah (UT)

Section C -- Title and Settlement Fees

Fee	Amount
Settlement fee	$600 (estimate)
CPL	$25
Lender's title insurance	See table below

UT Lender's Title Insurance -- Competitive Market (Stewart rates, effective 4/10/2023):

Loan Amount Range	Rate
$0 -- $10,000	$200 flat
$10,001 -- $100,000	$200 + $5.50 per $1,000 over $10,000
$100,001 -- $200,000	$695 + $5.00 per $1,000 over $100,000 (approx)
$200,001 -- $500,000	$1,195 + $4.00 per $1,000 over $200,000 (approx)
$500,001+	$2,395 + $2.00 per $1,000 over $500,000 (approx)

Refinance discount: 50% of basic schedule for standard coverage loan policy.

Section E -- Recording and Taxes

Fee	Amount
Mortgage/transfer tax	$0 (Utah has no mortgage tax)
Recording -- new deed of trust	$40 flat
Recording -- reconveyance	$40 flat

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Calculation Procedure

Follow these steps in order when calculating closing costs:

1. Validate property state. Confirm the borrower's property state is in the licensed states list (GA, AL, FL, KY, NC, OR, SC, TN, TX, UT). If not, stop and defer to the mortgage-compliance skill. Do not estimate fees for unlicensed states.

2. Determine product type. Identify whether the loan is Conventional, FHA, FHA Streamline, VA IRRRL, or VA Cash-Out. If the borrower has an existing FHA loan and wants a rate/term refinance, the product is FHA Streamline. If the borrower has an existing VA loan and wants a rate/term refinance, the product is VA IRRRL.

3. If VA, confirm funding fee type. Read vaFundingFeeType from the scenario context (set during Phase 1 data collection). If not already set, ask the borrower about first-time vs. subsequent use and disability exemption (see mortgage-loan-officer skill, Section 3).

4. Look up the state fee schedule. Locate the correct state section above for the borrower's property state.

5. Calculate Section A fees. Underwriting fee ($1,290) plus any discount points from the selected rate. If the rate has no points, discount points = $0.

6. Calculate Section B fees. For Conventional, FHA, and VA Cash-Out: fixed total $793 ($150 credit report + $550 appraisal + $8 flood certification + $85 tax service fee). For FHA Streamline and VA IRRRL: fixed total $243 ($150 credit report + $8 flood certification + $85 tax service fee) -- no appraisal required.

7. Calculate Section C fees. Use the state's settlement fee, CPL, and lender's title insurance formula with the borrower's loan amount. Apply the bracket/formula calculations exactly as specified. Do not apply reissue/refinance discounts unless the borrower confirms a prior title policy exists.

8. Calculate Section E fees. Use the state's recording fees and any applicable state taxes with the borrower's loan amount. Apply tax formulas exactly as specified.

9. Calculate product-specific fees if applicable.

   • Conventional: No additional fees.
   • FHA (standard): 1.75% of loan amount (UFMIP, financed). Use financedFees.ufmip from the pricer response (1.75% of loan amount, financed).
   • FHA Streamline: Calculate UFMIP with refund netting (see "FHA Streamline -- UFMIP with Refund Netting" section above). Calculate max loan amount per the HUD 4000.1 worksheet formula. Use financedFees.ufmip from the pricer response. Calculate UFMIP refund netting per the existing formula. The pricer's financedFees.totalLoanAmount reflects the total after financed fees.
   • VA IRRRL (non-exempt): 0.5% of loan amount (financed). Closing costs may be financed into the loan. Use financedFees.vaFundingFee from the pricer response.
   • VA Cash-Out (firstTime): 2.15% of loan amount (financed). Use financedFees.vaFundingFee from the pricer response.
   • VA Cash-Out (subsequent): 3.3% of loan amount (financed). Use financedFees.vaFundingFee from the pricer response.
   • VA exempt (vaFundingFeeType: 'exempt'): $0 funding fee regardless of refinance type. The pricer returns vaFundingFee: 0 and totalFinanced: 0.

10. Sum all sections for total estimated closing costs. Add Section A + Section B + Section C + Section E subtotals. For FHA Streamline: this is the amount that must be covered by lender credit or paid out of pocket (cannot be financed). For VA IRRRL: this amount can be financed into the new loan if the borrower prefers. Do not include financed fees (UFMIP, VA Funding Fee) in the out-of-pocket total.

11. Separately note financed fees. If FHA or VA, present the financed fee amount below the total with the note that it is typically financed into the loan and not paid out of pocket.

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Presentation Rules

Itemized Table Format

Present fees in a clear itemized table grouped by section:

• Section A -- Lender Fees: Underwriting fee, discount points
• Section B -- Third-Party Fees: Credit report, appraisal, flood certification, tax service fee
• Section C -- Title and Settlement Fees: Settlement fee, CPL, lender's title insurance (and title commitment fee if applicable)
• Section E -- Recording and Taxes: Recording fees, state-specific taxes

Show subtotals per section and a grand total of estimated out-of-pocket closing costs.

If the loan is FHA or VA, show the financed fee (UFMIP or VA Funding Fee) as a separate line item below the grand total, clearly marked as "typically financed -- not paid out of pocket."

FHA Streamline Presentation

For FHA Streamline quotes, present closing costs with a note about how they will be covered:

• "FHA Streamline closing costs cannot be financed into the loan. The estimated closing costs of $X can be covered by a lender credit if you select a rate with lender credit, or paid out of pocket."
• Show the UFMIP refund netting calculation: original UFMIP, refund percentage, refund credit, and net UFMIP.
• If max loan amount is a constraint, note it.

VA IRRRL Presentation

For VA IRRRL quotes, note that closing costs can be financed:

• "VA IRRRL closing costs of $X can be financed into the new loan amount, or paid out of pocket."

Required Compliance Disclosures

Include all of the following after the itemized table:

• "Fees shown are estimates and may change. Certain fees are subject to regulatory tolerance limits. You will receive an official Loan Estimate after submitting a full application."
• "Title insurance premium shown is an estimate. You have the right to shop for title services."
• If a reissue/refinance discount on title insurance may apply: "A refinance discount on title insurance may be available if a prior title policy exists on the property."

Rules

• Defer all regulatory questions to the mortgage-compliance skill.
• Do NOT include escrows (homeowners insurance, property taxes) or prepaid interest in the closing cost total. These are not costs of the refinance.
• Do NOT combine or simplify the itemized breakdown. Always present the full line-item detail.
• If a state has a $0 tax (e.g., no mortgage recording tax), still list it in the table with "$0" so the borrower sees it was considered.