Guide To Refinancing Your Mortgage - part 2

by Ron King

Survey Costs $125 - $300.

Homeowner's Hazard Insurance $300 - $600.

Lender's Attorney's Review Fees $75 - $200. The lender will usually charge you for fees paid to the lawyer or company that conducts the closing for the lender.

Title Search and Title Insurance $450 - $600. This charge will cover the cost of examining the public record to confirm ownership of the real estate, and the cost of an insurance policy.

Home Inspection Fees $175 - $350.

Loan Origination Fees 1% of loan. The origination fee is charged for the lender's work in evaluating and preparing your mortgage loan.

Mortgage Insurance 0.5% - 1.0%. Depending on the type of loan you have and other factors, another major expense you might face is the fee for private mortgage insurance.

Points 1% - 3%. Points are prepaid finance charges imposed by the lender at closing to increase the lender's yield beyond the stated interest rate on the mortgage note. One point equals 1% of the loan amount.

Prepayment Penalty. A prepayment penalty on your present mortgage could be the greatest deterrent to refinancing. The mortgage documents for your existing loan will state if there is such a penalty. In some loans, you may be charged interest for the full month in which you prepay your loan. In the future, always make sure there is NO prepayment penalty.

In Conclusion

A homeowner should plan on paying an average of 3 - 6 % of the outstanding principal in refinancing costs, plus any prepayment penalties and the costs of paying off any second mortgages that may exist.

Whether or not that is a wise decision is purely a numbers matter.

Copyright (c) Ron King

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