Mortgage refinancing fees to be aware of when refinancing your home mortgage
There are various mortgage refinancing fees that you could be charged when refinancing your home morgage. Here is a list of the various fees for reference.
Application Fee
Charge from the bank or other lender that covers the initial costs of processing your loan request and checking your credit report.
Appraisal Fee
This fee pays for an appraisal which is a supportable and defensible estimate or opinion of the value of the property.
Home Inspection Fee
This fee covers the cost of having a professional home inspector check the condition of the home. The inspection includes a long list of items that are reviewed which provide a report on the structure the building, the roof and foundation and the home’s general condition. It is very useful to get a home inspection done as they can point out many items you may overlook such as water damage, termite damage or the condition of the heating and cooling systems.
Lender's Attorney's Fees
The lender may charge for fees paid to the lawyer or company that conducts their closing. Settlements are conducted by lending institutions, title insurance companies, escrow companies, real estate brokers, and attorneys for the buyer and seller. In most situations, the person conducting the settlement is providing a service to the lender.
Loan Origination Fee
This fee is charged for the lenders work in evaluating and preparing your mortgage loan. In many cases this fee can be combined with the application fee
Points
Points are prepaid finance charges imposed by the lender which depending on market conditions. Points increase the amount you pay in relation to the stated interest rate on the mortgage note. One point equals one percent of the loan amount. For example, one point on a $100,000 loan would be $1000. In some cases, the points you pay can be financed by adding them to the loan amount.
Prepayment Penalty
The prepayment penalty is likely the largest cost when refinancing your mortgage. The practice of charging money for an early pay-off of the existing mortgage loan varies by state, type of lender, and type of loan. Prepayment penalties are forbidden on various loans including loans from federally chartered credit unions, FHA and VA loans, and some other home-purchase loans. The morgage documents for your existing loan will state if there is a penalty for prepayment. In some loans, you may be charged interest for the full month in which you prepay your loan.
Survey Costs
This fee covers the cost of surveying the property to ensure the structures fall within the property line not encroaching on neighboring property.surance.
Title Search and Title Insurance This charge will cover the cost of examining the public record to confirm ownership of the real estate. It also covers the cost of a policy, usually issued by a title insurance company, that insures the policy holder in a specific amount for any loss caused by discrepancies in the title to the property. Be sure to ask the company carrying the present policy if it can re-issue your policy at a re-issue rate. You could save up to 70 percent of what it would cost you for a new policy.
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