Refinancing mortgage closing costs can be a costly endeavor for any homeowner that neglects to research lender fees and closing costs. Closing costs are a fact of life; overpaying at the closing table doesn’t have to be. Here are several tips to help you avoid overpaying for your new mortgage when refinancing.
There are a number of options available to you when it comes to closing costs. You can pay these expenses out of pocket or you can finance them with your mortgage loan. Financing closing costs is an extremely expensive way to go; however, if you are short on cash this option could get you into your home with little or no money.
Types of Closing Costs
Closing costs fall into two basic categories: recurring expenses and non-recurring expenses. These expenses vary widely from one lender to the next so it is important to understand what you are paying before you sign the loan contract. Typically you can expect to pay 3 to 5 percent of the loan amount in closing costs, but if you do your homework you can pay significantly less.
When you refinance your mortgage loan, most of the fees you pay at closing are of the non-recurring variety. Examples of non-recurring fees include points, lender fees, application fees, title search, and legal fees. Your recurring fees differ in that you are required to pay recurring fees every year. Your home’s property taxes are one example of a recurring fee.
What Can You Expect to Pay at Closing?
To avoid surprises, you need to review an itemized list of closing costs and who the fees are being paid to. Your mortgage lender will provide this to you in the form of the “Good Faith Estimate.” The Good Faith Estimate is a standardized document lenders are required by law to provide after receiving your application. The trick to finding a good deal is that you don’t have to wait to get this document; most lenders will provide it to you upon request. Use the Good Faith Estimate to make an informed decision when it comes choosing the most competitive loan offer. You can learn more about your mortgage options and common mistakes to avoid by registering for a free mortgage guidebook.
To get your free mortgage guidebook visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.
Claim your free guidebook today at: http://www.refiadvisor.com
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