Reduce Refinancing Costs

There is much more than a lower rate and payment to determine whether to refinance a mortgage. Lenders try to make refinancing as attractive as possible by rolling the closing costs into the new mortgage so there isn’t any out of pocket cash required.

The closing costs associated with a new loan could add several thousand dollars to your mortgage balance. The following suggestions may help you to reduce the expense to refinance.

· Tell the lender up-front that you want to have the loan quoted with minimal closing costs.

· Check with your existing lender to see if the rate and closing costs might be cheaper.

· Shop around with other lenders and compare rate and closing costs.

· If you’re refinancing an FHA or VA loan, consider the streamline refinance.

· Credit unions may have lower closing costs because they are generally loaning deposits and their cost of funds is less.

· Reducing the loan-to-value so mortgage insurance is not required will reduce expenses and lower the payment.

· Ask if the lender can use an AVM, automated valuation model, instead of an appraisal.

· You may not need a new survey if no changes have been made.

· There may be a discount on the mortgagee’s title policy available on a refinance.

· Points on refinancing, unlike a purchase, are ratably deductible over the life of the loan ($3,000 in points on a 30-year loan would result in a $100 tax deduction each year.)

· Consider a 15-year loan. If you can afford the higher payments, you can expect a lower interest rate than a 30-year loan and obviously, it will build equity faster and pay off in half the time.

A lender must provide you a list of the fees involved with making the loan within 3 days of making a loan application in the form of a Loan Estimate and a Closing Disclosure Form. Every dollar counts, and they belong to you.

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About Pete Doty

As a Realtor® Pete has been working in the Denver residential market since he first started in 1985, and focusing primarily in the south end of town. He finds the client the home they want, and then help them sell it when they want to move. Marketing is really where his heart is, and making sure his clients’ interests are watched over in Littleton, Highlands Ranch, Parker, Castle Rock, Centennial, Englewood, Morrison or Denver. His web site www.DenverRelocation.com ranks high in search rankings and generates numerous relocating buyers each year. Talk to Pete for a unique perspective on today's real estate market in Denver.
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