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How can one reduce their closing costs when refinancing?

Asked by Trulia Chicago, Chicago, IL Wed Jan 30, 2013

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Rusty Payton’s answer
BEST ANSWER
One way is to use the same title company that issued your purchase tittle policy. Many title companies will discount the title policy cost if they issued the prior policy. Be wary of lenders that offer unusually low or "no cost" financing as you will most likely be paying those costs by paying a higher interest rate which over the course of the loan can add up to substantially more than the costs you seek to avoid. When you have a quote in hand take it to another lender and ask them if they can "beat it."


Rusty A. Payton, Broker
iMove Chicago
1225 W Morse
Chicago, Illinois 60626

773-856-6200 [Office]
773-856-6201 [Fax]
773-682-5210 [Mobile]

e. payton@iMoveChicago.com


http://www.iMoveChicago.com

blog: iMoveBlog.com
0 votes Thank Flag Link Sat Feb 2, 2013
Closing costs are standard in refinancing a home. The costs can be added to the principal of the loan or lender credit of closing costs. Each borrower has different needs. Let me know if I might be able to help you. Joanna 773-327-3580
0 votes Thank Flag Link Thu Jan 31, 2013
Trulia Chicago,

I love the term no closing cost to the consumer by paying a higher rate or “simply” rolling the costs into the new loan. Regardless of how you look at it the consumer will be paying for the closing costs of the refinance at closing or financing the closing cost over the entire course of the loan.

Each consumer has different needs and situations when it comes to refinancing. Some consumers simply will not have the upfront monies to pay the fees to refinance their homes and they are refinancing to save themselves badly needed dollars they need back in their pocket as quickly as possible paying the higher rate or financing the closing cost in the loan my be that consumers best option.

Consumers should shop around with a couple of mortgage lenders and determine the best route for them.
0 votes Thank Flag Link Thu Jan 31, 2013
Shop it around. I say get 2 opinions at least. 1 from a lender. 1 from a broker. Not to toot our own horn, but we are beating the lenders in rates and fees all day long twice on Sunday.

Sean Cochran
Quality Mortgage Lending
630-330-2229
http://www.qmlending.com
0 votes Thank Flag Link Thu Jan 31, 2013
Number one, shop around. Talk to multiple lenders to see what options are available. If you have some equity, then you might be able to roll the costs into the loan balance.

Best regards,

Ivan Sagel
312.515.7823
Ivan@atproperties.com
0 votes Thank Flag Link Wed Jan 30, 2013
By getting a slightly higher rate you can have most or all of your costs covered. The vast majority of my clients choose this No Cost option when refinancing.
Web Reference: http://www.BJDLOANS.com
0 votes Thank Flag Link Wed Jan 30, 2013
A lot of times you can knock them off, but at a higher rate.
0 votes Thank Flag Link Wed Jan 30, 2013
Most closing costs on refinances (such as appraisal, credit report, flood certification, title work, recording) are set fees from third party vendors that are necessary. There shouldn't be too much of a discrepancy in these costs from mortgage company to company.

The real variances come from what the mortgage company is charging. In the last few years, we've seen most companies in the same ballpark, unless the loan has extenuating circumstances. Paying discount points is usually up to the borrower. Sometimes it's mandatory in order to make a deal work (i.e. low credit score / high loan-to-value). I would only suggest this option if the dollar and interest savings over time is enough to justify the cost of the discount point(s). More often than not, if the person isn't going to be staying in the home for longer than 10 years, it usually isn't.

I usually use any premium in the rate to pay for the borrowers costs on a refinance. Again, the rate might be an 1/8th higher, but it saves the customer money, while the increase in payment on that 1/8th of a point is minimal, and so is the interest difference. And they get to write off more on their taxes too, which should wash out any monthly payment increase.

I give all my clients options with costs and without costs and almost all of them choose the no (or low) cost option.

I hope this helps. Please contact me with any questions.

Thanks,
JP


JP Marzano
Senior Loan Officer - NMLS #574681
Chicago Financial Services
312-204-6556
jpmarzano@cfsmortgage.com
http://www.themortgagecall.com
0 votes Thank Flag Link Wed Jan 30, 2013
Shop around with various lenders and ask for a quote with little to no costs.
Most lenders will be able to offer this option but your rate may be higher.
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773-290-0455
0 votes Thank Flag Link Wed Jan 30, 2013
Agree to a higher interest rate. You don't have to go with the best offered and often you can still reduce your payment.
Web Reference: http://www.ryangossett.com
0 votes Thank Flag Link Wed Jan 30, 2013
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