Fees. This pays the
lender to review your application and paperwork, and
to prepare your loan.
This penalty is usually reserved for home loans in their
early years, and goes away after five to seven years.
However, this can be a hefty sum, and often makes a
refinancing worthless or even more expensive.
Attorney’s Fees. The
lawyer who does the closing for the lender charges them
a fee, and the lender passes that on to you. You may
also want to have an attorney on hand, which you would
also pay for.
Other Services. You
will also pay for title insurance, title searches, mortgage
insurance, surveys, inspections, possibly some points,
and other miscellaneous fees.
In all, expect to pay from three to
six percent of the loan amount. Many of these services
and fees are non-negotiable, and some of the services
are required by law.
If you want to save money, try checking
with your current mortgage company. Those loan representatives
may be willing to eliminate or reduce some of the fees
for you. Remember to speak with professionals about
refinancing before taking the step. You will have to
be ready for the initial outlay of cash, so no ahead
of time how much that might be before you begin a process
you may not be able to finish.
Also don’t listen to lenders who tell
you they can loan you more than your house is worth.
Remember that when you have to sell your home, you will
pay more than the house is worth for your payoff.