Refinance Your House Mortgage – Different Types of Closing Costs


Refinancing a home loan can be a lengthy process that entails many
fees. Closing costs are unavoidable. Homeowners have the option of paying
these fees out-of-pocket, or financing the fees into the mortgage. The
latter options will increase the principle balance of the mortgage by a
few thousand dollars. Before applying for a mortgage or refinancing, it
is important to understanding the two types of closing costs: recurring
and non-recurring costs.What are Closing Costs?When applying for a refinancing loan, many steps must be fulfilled
before the loan is finalized at closing. Unfortunately, these steps involve
fees. Unless otherwise negotiated, the homebuyer is responsible for
these costs. Closing costs vary from loan-to-loan. In a housing market
where properties are selling very quickly, homebuyers should be prepared
to pay 3 to 5 percent of the home price. As the housing market cools, it
may be possible to arrange for the seller to pay closing costs.What are Non-recurring and Recurring Closing Fees?There are two main types of closing fees. If using a mortgage broker,
they will likely explain the different fees. When refinancing a home,
most fees are one-time and paid at closing. These include the discount
and origination points, application fees, appraisal fees, title search,
credit report, etc.Recurring closing fees are also due at closing. However, homebuyers are
also required to pay these fees annually. Typical recurring fees
include interest, property taxes, and a variety of insurances. Homeowners may
choose to prepay recurring closing costs each year, or have the
premiums included in the new mortgage payment.What to Expect at ClosingTo avoid unexpected charges, homeowners are informed of estimated
closing costs before finalizing the mortgage loan. When requesting a
mortgage quote, potential lenders remit quotes with estimated fees. Thus,
there are no surprises.Lenders charge different fees. With this said, it is essential to
obtain Good Faith Estimates from at least three lenders. By doing so,
homeowners may pay less at closing.Try using one of ABC Loan Guide’s Recommended Mortgage Refinance Companies.Getting a mortgage quote is simple. Mortgage brokers can link
homebuyers will several types of lenders, offering a range of loans for all
credit types and incomes.