u/Asleep_Albatross_890

First time homebuyer in California. Do these closing costs look reasonable or does anything seem unusually high or negotiable?

Loan Costs
Application Fee: $175
Commitment Fee: $1,015
Appraisal Fee: $765
Credit Report Fee: $116.68
Flood Certificate Fee: $2.75
Tax Service Fee: $70

Title / Escrow
Title Endorsement: $25
Title Loan Tie-In Fee: $340
Title Notary Fee: $200
Recording Service Fee: $17
Settlement Mail Fee: $50
Lender’s Title Insurance: $1,600

Government Fees / Taxes
Recording Fees: $225
City Transfer Tax: $2,557.50
County Transfer Tax: $1,705

Prepaids
Homeowner’s Insurance (12 months): $1,548.69
Prepaid Interest: $2,794.26

Optional
Owner’s Title Insurance: $2,452
Total Closing Costs: ~$11.5k

We were initially told by lender that the relationship discount would be based on the current market value of the assets once transferred.

Based on that, we moved funds. But the next morning, they told us they would use the statement balance/value from the statements provided earlier.

Has anyone experienced this before?

I’m comparing two mortgage options on a loan amount of approximately $1.24M and would appreciate perspectives on which may make more financial sense long term.
10/1 ARM at 5.5% (no rebates/credits)
30-year fixed at 5.875% (no rebates/credits)

Context:
Primary residence
Located in San Jose area
Trying to balance monthly payment savings vs. rate stability
Likely to stay in the home long term, but open to refinancing if rates improve

Which option would you choose in today’s market and why?