Advice and information on refinance closing costs - The Bills.com Blog
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Advice and information on refinance closing costs
Question: I have been getting high closing cost quotes in my search to refi my home. My so many fees? loan orgination, credit report, tax service fee, processing fee, underwriting free, admin fee. flood cert fee, courier fee, doc prop fee, it crazy!
Answer: Comparing mortgage closing costs is one of the most confusing, frustrating exercises a consumer will go through. Different lenders call the same fees different things. Some lenderscharge a slew of separate little fees and others charge a few bigger fees. As anyone who has shopped around for a mortgage knows, it is extremely difficult to compare one lender's offering to with that of another lender because the up-front fees vary so much and are not guaranteed. Lenders and their venders can, and sometimes do, add or inflate fees in the eleventh hour of a transaction.
If you are looking into refinancing, the first call you should make is to your existing lender, who already has critical information about you and your house on file. Since you have an existing relationship, a "streamlined" process might be possible. That can save you a lot of extra paperwork and money on everything from application fees to appraisal fees.
A good real estate agent can help you tremendously. They should know the local market well enough to help you save money in whatever way they can. Since closing costs are handled differently in different areas, having a professional with experience in that area is
your best bet. They can give you a better idea of what costs the buyer customarily pays, and which ones are paid by the seller.
The mortgage broker you deal with can make a big difference in your closing costs too. Have them show you several programs suited to your needs. There are many ways to structure closing costs based on your points and down payment.
Lenders are required to give you a good-faith estimate of your closing costs within three days after you apply for a loan. Some will give you such an estimate even before you apply if you ask for one. Even if it is no guarantee, this written estimate will give you an idea of what kind of fees you can expect to pay, as well as an opportunity to negotiate for a better deal. Keep in mind that the good faith estimate does not include such out-of-pocket costs as state mortgage taxes, homeowners insurance and property taxes, which you may be expected to pay at the time of closing. In fact, your total tab at closing could be several times more than originally
estimated.
Closing costs are certainly a consideration for both new loans and refinancing. However, it is important to not lose sight of what should be your first priority ? getting the lowest rate possible. The lesson is that you not only have to shop around, but you must compare and probe to find out which lender is really offering the best deal. Mortgage fees vary widely.
I can imagine you being overwhelmed by the terminology, but take a look at a list explaining the different closing costs on Wikipedia at http://en.wikipedia.org/wiki/Closing_costs, this list is in no way comprehensive but that should give you an idea. Bills.com has a wealth of resources on the mortgage page, which is accessible at http://www.bills.com/mortgage/.
I hope the information provided helps you Find. Learn. Save!
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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