1 year, 8 months ago
via credit-qna.com
What fees are associated with refinancing a mortgage?
My wife and I are trying to figure out if it would be worth refinancing our mortgage to pay off a couple of bills. What fees should we be expected to pay to refinance? I want to figure if it would be worth the fees or not.
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M$1 Answer
When you are refinancing your mortgage, don’t be surprised if you have to spend 3% to 6% of your outstanding principal in fees for refinancing. These expenses would be in addition to any prepayment penalties or other costs for paying off your current mortgage. Refinancing costs can vary from state to state and from lender to lender. I’ve researched some usual and customary fees and average range that you might have to pay if you refinance.
1. Application fee- This is the charge that is the first processing cost for your loan request and checks your credit report. Even if your loan is denied, you might still have to pay this fee. The charge is usually $70 to $300.
2. Loan origination fee- This fee is charged by the broker or lender to assess and arrange your mortgage loan. The charge is usually 0% to 1.5% of the loan principal.
3. Points- There are two types of points that you might be responsible to pay. The first is loan-discount points which are a onetime charge that is paid to reduce the interest rate of your loan. The second type of points is what some brokers and lenders charge to earn money on your loan. A point is equal to one percent of your mortgage loan amount. The charge is usually 0% to 3% of the loan principal.
There are many other fees such as appraisal fees, inspection fees, attorney review/closing fee, and homeowner’s policy to mention a few. The best thing you can do is check with your lender or broker to get all the proposed fees before you dive in to refinancing. Good luck!
1. Application fee- This is the charge that is the first processing cost for your loan request and checks your credit report. Even if your loan is denied, you might still have to pay this fee. The charge is usually $70 to $300.
2. Loan origination fee- This fee is charged by the broker or lender to assess and arrange your mortgage loan. The charge is usually 0% to 1.5% of the loan principal.
3. Points- There are two types of points that you might be responsible to pay. The first is loan-discount points which are a onetime charge that is paid to reduce the interest rate of your loan. The second type of points is what some brokers and lenders charge to earn money on your loan. A point is equal to one percent of your mortgage loan amount. The charge is usually 0% to 3% of the loan principal.
There are many other fees such as appraisal fees, inspection fees, attorney review/closing fee, and homeowner’s policy to mention a few. The best thing you can do is check with your lender or broker to get all the proposed fees before you dive in to refinancing. Good luck!
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