What are closing cost?
What are closing costs

Closing costs mainly consists of :

  • Third party costs
  • Propety Taxes & Insurance
  • Lender fees.
Third party costs are fees that you or the lender pays on your behalf for you to obtain a mortgage, It mostly includes appraisal fee,attorney fee,credit report fee, title fee, mortgage recording fee. When home refinancing review these costs carefully as some lenders may have lower costs.
Mortgage taxes will be exactly the same between all lenders, so they do not have to be reviewed.Points and lender fees are essentially what the lender charges to originate your home loan when homerefinancing and for a new home loan.
Normally,one point which is 1% of loan amount paid at closing will get your rate down by 0.25%.

How to compare Home Refinancing Options

First and foremost, make sure you are comparing current mortgage rates for the same type of mortgage. Mortgage rates and closing costs can change significantly from one day to another, so ifyou are comparing offers from multiple lenders it must be done on the same day. For example, if you are shopping mortgage rates and have a quote for a 30 year fixed at 3.75%, only compare it to other lender with same 30 year fixed quotes at 3.75%.
Next, compare the total of all points and lender fees for each mortgage, that is the price of themortgage. The lender with the lowest cost has the best mortgage rates.
If you are refinancing, you will also need to review the cost of title insurance, closing/attorney, and appraisal. The company with the lowest combination of points, fees and third party costs for the same rate and product has the best mortgage rates.

Home Re-fi options

Completing a Mortgage Refinance can be a smart way to improve for your financial situation. Depending on your circumstances you may want to undergo mortgage refinancing for any of the following reasons:
Mortgage Refinance To Lower Your Mortgage Rate & Payment
Even a small reduction in your mortgage rate can have a significant impact in the long-run. Refinancing to lower your monthly payment frees up cash flow, so you can manage your money more effectively. Furthermore, if you plan to stay in your home for a long time, you may want to mortgage refinance and consider buying down your rate to reduce your monthly payment. If you have equity in your home, home loan refinancing could enable you to lower your mortgage payment significantly.

Mortgage Refinance To Consolidate Debt

If you have debt outside of your mortgage and you have equity in your home, it's time to refinance your home loan. You are likely paying a much higher interest rate on credit cards and auto loans, and by mortgage refinancing you could roll all of these debts into one tax deductible loan. Credit card interest rates can be as high as 25%. Refinancing your home to pay off and consolidate debt under one low mortgage rate is a smart maneuver. A well structured home refinance could save you a great deal of money.


Mortgage Refinance To Get Cash Out Of Your Home

Completing a mortgage refinance can get you cash out of your home for a variety of purposes, including education expenses, vacations, other investments, home improvements and more. Mortgage refinancing is a much better option than using credit cards or personal loans.

Mortgage Refinance To Pay off Your Home Loan Faster

A mortgage refinance can be structured to pay off your home quicker. Instead of refinancing into a typical 30 year mortgage, you could get a 20, 15, or even 10 year fixed so you pay it off quicker. Also, many home refinance loans give you the option of paying more on your principal every month so you can pay down your home loan fast as well. Refinancing allows you to move into any type of mortgage loan.

Mortgage Refinance To Move To A Fixed Rate From An ARM>

Adjustable Rate Mortgages (ARMs) are great when mortgage rates are low. However, as rates increase that ARM quickly becomes a significant burden. That's when it is time to consider mortgage refinancing into a fixed rate loan. Especially if you plan on staying in your home for a few years, a refinancing your mortgage makes a great deal of sense. Refinancing into a stable fixed rate may give you peace of mind. More on fixed rate mortgages.
Mortgage Refinance To Eliminate Private Mortgage Insurance (PMI)
If you were unable to make a down payment of at least 20% when you first obtained your mortgage loan, you may be paying PMI. If your house has appreciated and/or you have paid down your existing mortgage, you may be able to mortgage refinance your home to eliminate your monthly PMI payment. Along with possibly lowering your rate, a mortgage refinance could reduce your monthly mortgage payment considerably.
If you've made your payments on time for at least two years and your current mortgage balance is now less than 80% of your home's current market value (because of price appreciation or pre- paying principal), you can ask your lender to drop the PMI requirement on your loan. Typically, that means you will have to pay for an appraisal to prove that you have sufficient equity in your home.
An appraisal typically costs $300-400. Since you have to pay for an appraisal anyway, it may make sense to go ahead and refinance your mortgage at the same time you are dropping your PMI insurance. Even a small drop in your monthly payment, combined with eliminating the PMI payment could add up to substantial monthly savings.

Finally..

To determine which option is best for you, you should consult a mortgage professional.
At RB Realty Group, we give you HONEST answers and expert advice.
In some cases, your best option may be to simply keep your current loan instead of refinancing.
If that's the case, we'll tell you.
Very few other mortgage companies would ever a tell a potential customer NOT to do a loan!
So if you're trying to decide whether it makes sense to refinance your mortgage, call Ravi now at (713) 376-7483..
You'll get honest, straight-forward answers and NO pressure!