Who should pay for a mortgage subordination fee?
I am refinancing my first loan. The bank has to submit papers to my second loan bank for subordination. My first bank wants me to pay the subordination fee. The second bank tells me that the borrower (me) should not have to pay that fee. Who is responsible for the subordination fee?
Normally when a first mortgage is paid off the second moves into the first position unless the holder agrees to "subordinate" the second. A subordination agreement is an instrument that allows a first lien or interest to be paid off and allows another first mortgage company to come in and be the first priority lien holder.
It is very common for the borrower to pay subordination fees. The second mortgage belongs to the borrower and most likely it is the borrower requesting to keep it open. Most banks handling a refinance would rather you pay-off the second mortgage rather than subordinate.
If you are still shopping for a mortgage refinance, visit the Bills.com mortgage refinance savings center for no-cost quotes from up to four pre-screened lenders.
I hope this information helps you Find. Learn & Save.
Best,
Bill
The Latest on Mortgage Rates
No surprise that mortgage rates fluctuate. If you are thinking about purchasing a home or maybe considering refinancing your current mortgage, then you want to be up to date on mortgage rates.
Mortgage rates April 10, 2024
According to Freddie Mac, the 30-year mortgage rate for the week of April 10, 2024 stands at 6.88%. This 6 basis points increase from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for April 10, 2024 is 6.16%, indicating a 10 basis points increase from previous week’s rates.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
What does the mortgage rate mean for you?
Mortgage rates play a vital role in determining your monthly payment. Let's take a look at the avergage interest rates (APR) for April 14, 2024 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- For a 30-year conventional loan, the interest rate is 7.09%.
- If you opt for a 15-year conventional loan, the interest rate stands at 6.29%.
Using the rates mentioned above, a $279,082 30-year-year mortgage would result in a monthly payment of $1,874. On the other hand, a 15-year mortgage would require a monthly payment of approximately $2,399.
Experience a smooth mortgage process: Shop around and get pre-approved today!
Shopping around for mortgages and getting pre-approved can make your home-buying or refinancing process easier. Ready to take the plunge? Check Out mortgage rates now for the best options available.
4 Comments
From my perspective, the important bits of information to learn are, was the servicer really fishing for a reason to kill the deal, and did it know of the nearby foreclosure?
We are in the process of closing on a VA IRRRL refinance, involving the subordination of a HELOC. The lender agreed to the subordination and we submitted the request to our secondary lender to whom we paid $350.upfront and directly. Comes closing day, we sign the documents and realize afterward, that the title company has charged us $350. for subordination charges. I recognize the requirement for the secondary lender fees, but is customary for the title company to require additional fees, or are they double billing through an internal error of some kind?
This sounds like a double fee. The title company might charge a minimal fee for registering the subordination.