Four reasons not to refinance your home Globe and Mail
There is no magic number that represents an acceptable break-even period - it depends on how long you plan to stay in the house and how certain you are about that prediction. (Find out how to determine whether refinancing will put you ahead or even more behind. For more, see How Mortgage Refinancing Affects Your Net Worth .)
2. The long-term costs are too high
Refinancing to lower your monthly payment is great - unless it hurts you significantly in the long run. If you're several years into a 30-year mortgage, you've paid a lot of interest but not much principal. Refinancing into a 15-year mortgage will probably increase your monthly payment, possibly to a level that you can't afford. If you start over again with a new 30-year mortgage, you're starting with almost as much principal as you had at the beginning of your current mortgage. While your new interest rate will be lower, you'll be paying it for 30 years. So your long-term savings might be insignificant or the loan might even cost you more in the long run.
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What is the average closing costs when refinancing?
Figure 1.8% to 2.5% of the loan amount.
No matter what they say. There are fees. So get your thinking cap on and shop well before you get involved.
Do your homework and shop around. Use someone you trust and have them spell out your options for you. Depending on how long you keep the loan it may make more sense to pay your own costs and take a lower rate instead of taking a no cost loan...
Refinance closing costs?
I live in Oklahoma (if that matters). Does anyone know what the average closing costs would be to refinance a 109K Mortgage? Can you finance the closing costs into the loan?
1.no. but a lender can tell you what their fixed closing costs are.
2. yes.
What are closing costs for a $102,000 refinance (ballpark estimate)?
trying to refinance our home we owe 102,000 on it and the closing costs are going to be around 5,500 which seems way to high......what do you think the ballpark or average closing costs would be ?
3-5% is standard on new purchases - not sure what avg is for refi's - all the fees should be broken down for you - if you won;t be recouping that $5500 with the next 5 years or before you plan on selling and moving, then it's not worth refinancing
You could also call a title company to find out about their fees. The insurance part is state regulated, but their other fees can vary a lot. You may be able to choose your own, but a big lender like BofA or Wells Fargo will probably get a better price because of economy of scale.
The state you live in makes a difference, too. Some states have funky taxes, like the intangible tax in GA or FL. One state has a view tax, somewhere in New England but I can't remember which. Some require surveys and other don't, and those can be very expensive.
Does that include escrow or impound? If it does, your taxes and insurance costs will play a big part in the amount. Some banks require one full year of home owners insurance as well as 2 or 3 months of payments for both taxes and insurance.
You will never make up the difference in lower interest rates if it costs you $5,500 to get a new loan. Just keep the old loan and I suggest shopping the refinance with other lenders.
what is the average closing cost on rental home refinance 65000?
It depends on a few things for example - the bank you use - and even the day of the month that you close on. You should get a Good Faith Estimate from your lender within a week or less. This will show your estimated closing clost / payments etc.
What is the average cost of closing on a home refinance loan and why is it so high? I being charged $6500!?
My credit rating is 581, is this why??
Closing costs vary greatly by lender. There are some that are fixed figures, but the rest is tied to the loan amount.
Shop around a bit, ask for a truth in lending good faith estimate of closing costs. And don't stop there. Ask about transaction fees, pre-payment penalties, late fees - anything that could also cost you money down the line.
Make sure you are comparing apples to apples before you sign on the line.
You have the bank charges, and these can vary from zero to 2% of the loan.
Then you have "prepaid" items, including interest to the end of the month, and the amount they want to hold in the escrow account to pay your taxes and insurance when due; these can be several thousand dollars, but that's still your money, even after closing.
Then you have the attorney fees, including the title search and title insurance, and filing in the Land Records, and probably plus the cost for the closer to send the docs back in the overnight mail.
Your credit score impacts the loan availability and the interest rate, it doesn't impact the closing costs so much.
is it easy to refinance my mortgage with Bank of America?
I currently have a 30 year fixed mortgage that I obtained one year ago at 6.00%. I was looking today's rate and a 15 year fixed mortgage is 4.875%. Do you know how easy or hard is to refinance through Bank of America? Average closing costs to refinance? Thank you
My personal experience with BOA was that they are difficult to deal with, tack on a lot of questionable fees that if not disputed, can cost you hundreds more and in general were arrogant. maybe in today's economic climate they may be more accommodating.
When I refinanced 3 years ago, I went to BOA (holder of my mortgage), Wachovia, Wells Fargo and WaMu. The best deal I got was 1% less than BOA nad 3/4% less than the others. Wells Fargo came in lowest at 5.25% APR, quickly and with few junk fees.
Check them out and compare. If you have good credit, good equity and in a viable economic commuinity you are in the driver's seat. Good Luck
I have a 6.37% right now and can refinance at 4.87%. But, I'm being charged $5,000 for closing costs. Advise.?
I need to know if I am being ripped off with the closing costs. I don't know what the average cost of refincing closing costs are. It would take me two and a half years to re-coup the $5,000. But, I can save $170 a month on my mortgage payment.
Go to several places and banks. If you have poor credit, you end up paying so much it IS a ripoff.
I think $1,200 - $1,500 in costs is more reasonable and common, but I have very good credit.
$5-6K is about the average for closing costs, so no you are not getting ripped off.
Its a good deal
cost to refinance mortgage in New York?
What are the average costs to refinance in New York?
I want to refinance 360K and was quoted around $5,500 in closing costs.
I think you have contact some mortgage refinance lenders or refinance companies where you can get present cost of refinance mortgage in new york and first of all you have to contact the local companies in new york which provides this types of details you can try this source : http://www.refinancing101.net
What is an average closing cost on approx. 122,000.00 loan?
a loan started out to be just a refinancing of a house now it's end cost is 256,000.00 with closing cost of 4277.00, financed amount is only 118,576.00. Does this sound right?
Depends entirely on your state.
For example, Florida does not have a state income tax, so they charge heavy taxes on mortgage loans.
Fees are broken down into many parts, and without listing what the fees are going to, it is not fair to make a judgment call on your fees. If, for example, $3,000 is going to state taxes, then this loan is not very expensive at all. If, however, $3,000 is going to the broker as "origination", "points" or the like, then it MIGHT be an expensive loan.
In Ohio, you would expect to pay about $2,300 in the basic, non-broker, related costs. This includes title, pre-paids, taxes, and insurance escrows. This would mean about $2,100 to the broker.
In the scheme of things, $2,100 is not a lot of money to pay a broker - depending on whether they are also getting paid on the interest rate. Look for a little number somewhere on your "Settlement Statement" called "YSP" or "Premium" or Yeild Spread Premium. The number next to this (not added in the big column) is the amount the broker is getting from the bank outside of closing for arranging this loan.
In our example, if this amount was about $1,000, I would say this broker was fairly paid. Some might disagree with me, but about $3,300 in broker income is average for the industry. If it is over this, you'll need to consider what you are comfortable paying.
If you are within 3 days of the loan closing, you have the right to "rescind" the transaction by following the directions on the rescion paperwork. Follow them closely, as you likely have to fax the paperwork to the lender - not your broker.
If it is after 3 days, you'll be happy to know you are better informed today than you were then. You likley will have no recourse.
See a lawyer if you feel really screwed, but don't rely on the end cost to make your decision. You can pay off a 30 year mortgage about 6 years early by simply making an extra payment each year.
Finally, if your credit is bad, you should expect to pay more. It's not that you are getting screwed, it's just people are taking a bigger risk lending you money.
Best of Luck.
What is the average cost paid by someone in the secondary mortgage market for an existing mortgage?
I am curious as to what is the typical percentage paid on an existing mortgage in the secondary market currently. Is it merely a present value of money calculation, or is there more of a discount premium? For example, say you have a $300k 30yr fixed at 6%, by my calculations, over the life of the loan the lender would receive $347,515 in interest which would be there profit for lending the money, typically if a contract like this is sold as a right to receive these future payments they will not receive this entire amount due to present value calculations, but is there any more or less of a discount? So what is the rate or percentage a typical loan is sold for in a secondary market within its first few years? Also, do banks accept lower offers to get rid of loans now than the principle balance much as they are so willing to get rid of homes in short sale situations, etc. for banks that need cash and have obviously lent out most of their assets and want some cash assets back. The reason I am asking is, I know a personal lender who would possibly being willing to hold a mortgage for me at an equal or current rate as I currently have and that way I would be paying them a substantial and safe interest rate instead of a bank, and instead of me refinancing my current loan with a loan from this private individual I was thinking I could have them maybe make an offer to the current holder of my note to buy it, that way I would avoid closing costs, etc. And possibly they would give this person a good deal since so many banks are willing to liquidate loans for cash right now at substantial discounts to meet other needs even though they know I am a great borrower, I would think they may be willing to at least even take just the principal balance, or even less, and be happy with the interest they have received over the last 3 years, and enjoy having actual cash on hand since so many banks are hurting with other loans, though I don't know my lender's situation, they are a big bank/lender so I am sure they are experiencing difficulties with some borrowers and the economy as all others are. If anyone works or has personally held a loan and knows what type of value loans have in the secondary market compared to their principal balance and the expected income over the life of the loan I would greatly appreciated it. Also any tips if my thought is no good.
In response to Ronwhiz's attempt at an answer, assume this is as low of a risk loan as there could be that the lender will recoup all the principal and interest, which it is. Borrower has great credit, solid income and assets, and the loan-to-value ratio is still only half since I paid half cash for the home. I am merely looking for a general answer such as, typically a loan that seems to be low risk for like this goes for about 90% of the present value of the future income, that's all I am looking for, not more insight, just a generic answer, yes obviously, like most things, this will be evaluated on a case by case basis, I am just looking for a general average generic response, so please (Ron for example) don't give me further advice, opinions, or insight into the issue, this is yahoo answers, not a forum for your opinion, so please if you can answer this question please do, but an answer would be in the form of a percentage or rate not an opinion or insight.
Much more important for banks is to know what the risk is that the person taking the loan will default and what part of the outstanding capital can be recuperated by foreclosing the house. That's what the whole sub-prime crisis is about!
So starting from your credit rating, the bank evaluates those risks which result in a premium on the risk free 30 year T-bond rate.
To get an idea of the current market rates, try negotiating the refinancing of your loan, with a few banks, including your own. If you have a good credit rating and are will to pay back part of the principal so that the value of the mortgage is less than the actual market value of the house, they might be willing to do business.