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Mortgage Refinancing Fees - How Much You Really Have To Pay
By: John R. Blakefield
Refinancing your mortgage can be a great decision for some homeowners. In fact,
this is a great benefit of owning your own home. If your terms as the initial
purchase of the property were not the best you could qualify for, and your
financial profile has changed, then refinancing could cut down considerably the
amount of money you pay in interest over the life of the loan.
Refinancing your home is a big decision. The number one tip when considering
whether or not you should refinance is the total amount saved should be greater
than the cost it takes to actually refinance. This is important, because you do
not want to spend time and money refinancing your home when it is going to cost
you more than it saves you!
Perhaps seeing a shorter term, lower interest rate, or lower cap on an
adjustable rate mortgage looks tempting, but you never know if it is actually
worth it unless you do the math.
So considering this, let's look at the costs that go into refinancing a home
mortgage.
When refinancing, you must pay an application fee just as you did for your first
mortgage. This may cost anywhere from $75 to $300. Another cost you will run
into will be the checking of the title and title insurance. This cost of $450 to
$600 will verify your ownership by examining the public record.
Your home must also be appraised, in order to determine its current market
value. If you have had your home for a while, it could be worth considerably
more than when you bought it depending on its location and current market real
estate trends. This may cost anywhere from $150 to $500.
You're home will need a home survey which will cost $150 to $300. If you need an
attorney to review the information, this may cost $75 to $150. There may also be
a home inspection that will cost $175 to $350.
In addition to these fees, you will have to pay a loan origination fee that can
be bout 0.5% to 1.0% of the loan amount. You may need mortgage insurance that
can be about 1.0% of the total loan amount, and if you choose to pay points for
a lower interest rate, you may pay 1.0% to 3.0% in points.
As you can see, there are many fees associated with refinancing your mortgage.
It can be tricky to compare the scenario of keeping your original mortgage or
refinancing for different terms. Consider all costs and fees, even if they may
not be obvious. You can expect to pay about 3% to 6% of the total loan amount
when refinancing.
If after your thorough investigation and calculations, if the savings is greater
than the cost of refinancing, then go for it! You can save a considerable amount
of money by getting new terms, especially if your initial terms were less than
satisfactory.
About the Author:
John R Blakefield is a mortgage and real estate specialist. For more
information, articles, news, tools and valuable resources on home mortgages or
investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/. |
