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.