|What are closing costs|
Closing costs mainly consists of :
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
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
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
Mortgage Refinance To Get Cash Out Of Your HomeCompleting 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 FasterA 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>
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.
To determine which option is best for you, you should consult a mortgage professional.