Got Questions On Refinancing?
If you are thinking about the possibility of obtaining a home mortgage refinance loan, you may have some questions ... including some very basic questions such as "what is refinancing?" You will be provided with valuable information about home mortgage refinancing here.

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Refinancing Basics
What To Consider
Refinancing Options
Refinancing Strategies
Refinancing Procedure
Miscellaneous Tips
Loan Shopping





What to Consider When Refinancing: Costs

There are many factors that you need to keep in mind when considering home mortgage refinancing options. This includes the costs associated with home mortgage refinancing. In this article, you are provided with the information that you will need in regard to the costs associated with home mortgage refinancing.

Geography is Important -- Cost Differences from State to State

When you refinance your home loan, you are replacing one loan by paying it off with another. Because you are getting a new loan, you are likely going to pay the same costs and fees that you paid for the first loan, and may also pay an early payment penalty. Because some of these fees are outlawed in some states, what you pay will depend on where you live, your loan amount, your type of loan, and even the loan company you choose.

Understanding a Prepayment Penalty Clause or Provision

The first thing you should do is see if you will have a prepayment penalty and how much that would be. If it’s high, this may cause you to refinance later instead of pay the hefty fee. One way around this is if you are using the same loan company for your refinanced loan as you did for your first loan—ask them if the prepayment penalty can be waived if you get your refinanced loan through them.

Closing Costs

Your fees and closing costs are the next ones to consider. Find out how much your appraisal will cost. Often they are between $100 and $300. If you are refinancing with a VA loan, you will have to have a VA appraisal done. Next, ask potential companies what their loan application fees are, as well as title search and title insurance fees.

Home Inspection Costs

You will probably have to have a home inspection done as well. Make sure your potential loan companies give you an idea of what that will cost. Often the loan representatives must have their legal department or a lawyer look at the paperwork. You will be charged for this, so make sure they tell you what this will be before you apply for the refinancing.

Loan Orgination Fees

Loan origination fees are another cost to consider. This is what compensates the loan officer for her time in processing your application and tracking paperwork. Usually this is 1 to 3% of your loan amount, and is given in points, each point being 1% of your loan.

The Total Cost of Home Mortgage Refinancing

To find the total impact of your costs, figure out the total refinancing costs. Have the lender tell you how much you will save on your house payments, then divide that number into your refinancing costs. This is the number of months you should plan to be in the house in order to break even.

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