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.
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Mortgage market update: the latest
It is expected that mortgage rates are subject to change. Homebuyers and those refinancing their mortgages should pay close attention to the latest mortgage rate
Mortgage rates November 1, 2023
According to Freddie Mac, the 30-year mortgage rate for the week of November 1, 2023 stands at 7.76%. This 3 basis points decrease from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for November 1, 2023 is 7.03%, indicating a 0 basis points - no change - 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 November 2, 2023 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 7.70%.
- If you opt for a 15-year conventional loan, the interest rate stands at 6.84%.
Using the rates mentioned above, a $279,082 30-year-year mortgage would result in a monthly payment of $1,990. On the other hand, a 15-year mortgage would require a monthly payment of approximately $2,484.
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To make your life easier, we highly recommend shopping around for mortgages and getting pre-approved. This will streamline the home-buying or refinancing process and make it a breeze. Ready to get started? Check Out mortgage rates now for the best options available.