Refinancing's hidden costs
Mortgage rates are still low. But are you ready for the fees that come with a refi?
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Mortgage refinancing rates are still low, despite rising in recent month. But don't be hypnotized by the low percentage points when you are trying to decide whether to refinance. Consider this: There is a price to pay even above and beyond the "points" you'll be required to shell out. Make sure you factor these costs into your considerations. (Bing: Can I refinance my mortgage?)
Application fee ($75 to $300): You'll pay this fee even if your loan is denied.
Loan origination fee (up to 1.5% of the loan principal): A charge to evaluate and prepare the loan documents.
Appraisal fee ($300 to $700): Sometimes this cost is folded into the application fee. You can check to see if this fee can be waived if you have had a recent appraisal of your home.
Inspection fee ($175 to $350): Before you get your refinance loan, the lender may ask that you get your home inspected for structural problems, termites and other pests.
Attorney review and closing fee ($500 to $1,000): You may get charged for the lawyer who conducts the closing for the lender.
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Title search and insurance ($700 to $900): This will cover the cost of searching your property's records to make sure you are the rightful owner and to ensure there are no liens against the property.
Survey fee ($150 to $400): This fee may be waived if a survey of your land and buildings has been done recently.
Prepayment penalty (one to six months' worth of interest payments): Before refinancing, check the fine print of your current mortgage for prepayment penalties that will cost you extra if you pay off your mortgage early.
Before you jump into refinancing, make sure you understand not only the mortgage refinancing rates but all the hidden costs associated with refinancing your loan.
After reading some posts I have to wonder who these people get mortgages from.
We have done all our refinancing by email and phone. No home inspection or credit check or anything else. It has been a very easy process for us and we even asked for a lower rate and got it.
We just have to sign the papers now. Believe me my husband has gone through the paper work with a fine tooth comb. He knows exactly were we stand.
We are in the proces right now of refinancing.
We have not been asked for a home inspection. Maybe it is because we bought the house new and have been with the same lender from the start.
Also we are fortunate enough to pay all the closing and other costs without having it added to the mortgage. We are also paying more each month than we need to because we want to pay off the mortgage by the time my husband retires.
While it is true that there are extra costs to refinance for us it is a good thing because we can absorb them without borrowing the money.
The only way I will refinance is if the interest rate is 2% !
What a bunch of **** ! The bank had me jumping through hoops! All kinds of inspections, credit checks, and additional fees. At one point I asked the broker: " Let me see if I have this straight, I have been paying for my home for 4 years, and I have to go through all this nonsense?" In the end I saved about $300.00 per month, so; let's do the math: 30 year loan total savings (@4.8%) is $108,000.00. I have and some other offers, but I will not go through the aggravation of refinancing again unless it meets the amount listed above!
Home ownership is not what it used to be in america. Renting has become more and more appealing.