Normally how much would it cost me for the closing cost when i refinance?

Answer 1

Closing Costs (or the cost of refinancing)
First, I'd like to debunk the notion of "No Closing Costs", heavily advertised by national marketers and banks. Have you ever heard the expression "There's no such thing as a Free Lunch?". All things in this world have costs to produce, and if you know anything about the companies that produce things, you'll agree that they do their darndest not to pay for them themselves. The cost of originating or refinancing a mortgage average anywhere from 2% to 5% of the balance of the loan, depending largely on geographic location, property type, value of the property, amount of the loan, and of course credit score. Many banks try to foster a notion that they somehow "care" about their customers so they will somehow magically absorb these costs, telling you that they make their money back over the years as you pay interest on the loan, but as a matter of fact the overwhelming majority of mortgages in the USA are sold from one bank to another bank, a servicer or even to Wall Street investors within the first few years of origination. This is so the lender can get more money to write more loans. They don't have them long enough to make back the costs of closing. For a breakdown of closing costs and how they are paid for (even in "Zero Closing Costs" promotions) have a look at the source http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-closing-costs-part-2/

Once you've reviewed the typical closing costs associated with a mortgage, it's time to consider how to pay for them. In a nutshell, costs can be paid in cash at closing, rolled into the loan so there's no out of pocket cost, or paid for by accepting a higher rate than you would qualify for otherwise. More information is available at the same source: http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-closing-costs-part-2/

Cost-Benefit Analysis
Finally, we can turn to the benefits of refinancing and weigh them against the costs.
Once you've decided what your goals are, the reasons you wish to refinance, then it's time to weigh them against the costs. Many borrowers try to compare closing costs alone, however as we know that closing costs can be packaged in many different ways, this is generally ineffective. Because most people who refinance are doing so to lower their total monthly payments, either by changing the type of loan or paying off debts, and in many cases trying to convert their adjustable rate mortgages to a fixed rate mortgage, a more holistic approach is to compare monthly payments across your total monthly spending, with the closing costs rolled in to either the balance of the loan or into a higher rate. To see examples, see source : http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-costbenefit-part-3/

Conclusion:
All loans costs money to originate and refinance, even if it's not always clear how you may be paying for them. Most of the time it's better to roll your closing costs into your loan, so that there is no out of pocket expense to you and the rate doesn't have to be increased. Always remember to see if the loan achieves your goals first, and don't put too much stock in the Good Faith Estimates you receive while shopping around, because people, whether broker or bank, are more than willing to lie to you to beat out their competition initially, so they can lock you into a process which you cannot easily reverse. My recommendation is to speak with as many people as you can, but evaluate them on the basis of trust. You may find that the person who gives you the highest quote may be the only one telling you the truth. This is not a simple subject to discuss, and while we have tried to treat the subject thoroughly, a consultation with a refinancing specialist would be the best way to get answers specific to your situation.

Answer 2

Contrary to what is posted above - there is such a thing as a no closing cost loan. Now before I continue, I'd just like to explain what this entails. There are always going to be some boilerplate costs of doing business - a lender fee, title/escrow fees etc. These costs are associated with most every loan, and depending on the size of the loan, can equal a few thousand dollars. Another fee associated with a loan is an origination fee. This is the fee that brokers directly have control over. A "no cost" loan is a loan where brokers do not charge any points (1 point = 1% of the loan amount). Now everyone understands business, and everyone knows that people do not work for free. Brokers are no exception. There are 2 way that brokers are compensated. Either the lending institution can pay the broker (where the broker sells a specific type of loan product, or a higher rate to the client) or the client can compensate the broker directly through origination fees.

These no cost loans are not "too good to be true" and you should not be wary of them. In the short run it actually makes far more sense to let the lending institution compensate the broker and pay slightly more $$$ each month on your monthly payment. Compare total costs to the slightly increased monthly cost of the loan if you were to take the no cost loan and find a break even point where costs equal what you've payed extra monthly over the long run. If you plan on staying in the house longer than this break even point then pay the origination up front. If you do not see yourself staying in the property longer than this break even point, take the increased rate and have the lender compensate the brokers.

If you have any other questions feel free to drop me a line.

Daniel Algieri
Loan Specialist
[phone] x 1491
[e-mail]

Answer 3

This varies somewhat, but prior to closing you should receive a preliminary HUD-1 statement that will spell it out. When I used to draw up closing documents for refinances, it was a function of origination points for the loan and the loan amount that caused the most variance. It is not uncommon to have $3K at the low end and as much as $35K at the high end. Some people who refinanced would also put a chunk of money down to lower their payments and interest over the long haul. It is also possible to have all your refi costs rolled back into the principal if your house is worth more than the amount you wish to finance. It is up to the lender to give you the estimated HUD-1, so ask them for it if you are in the process of refinancing.

Answer 4

There are alot of variables to figure in, we do not know your credit score , if you'll pay PMI etc.. but the golden rule is if its $5000 or less the deals probably alright. Places like AMC mortgage charge $10,000 plus... anyplace that says no closing costs are lying.. stay away from them.. the only way to get money for a house with no closing cost is an home equity loan..3% of the loan is the norm with good credit.. 680 score or higher..

Answer 5

No element in overwriting the ultimate costs... in case you do this they might desire to refund you the kind or replace the interior maximum loan quantity, which motives it to return to underwriting. As for the in step with/diem interest in case you have a decrease value with the recent loan extra useful to close in the previous (nineteenth) & pay in step with day value on decrease value from the twenty fourth (it is the day your very own loan money because of 3 day precise of rescission) to the thirty first on the extra much less costly value. because in case you shut later your contemporary loan could be charging you the in step with diem value on the better value. desire it is clever! In different words you're paying a daily value no count once you shut...Your payoff on excisting loan will boost daily you do not close.

Answer 6

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