Question by barbara d: Are there always closing costs when you Refinance a mortgage?
I’d like to know when it makes sense to refinance a 1st mortgage? What interest rate difference is worthwhile? And if you refi with same bank, can you negotiate the closing costs? Maybe say you will take your mortgage elsewhere?
Best answer:
Answer by Pixie
yes there are always closing costs for any mortgage, fees and taxes, etc
Add your own answer in the comments!
There are always costs associated with a mortgage, whether it be a refi or a new purchase. These costs are sometimes negotiable (depends on the lender). You can also have the closing costs rolled into the amount of the mortgage, or you can choose to take a slightly higher interest rate in return for lower costs (essentially “paying points”).
Just shop around… call at least 4 or 5 lenders and look online. Talk to them and see what they can do for you… it never hurts to ask if there’s anyway to lower the closing costs.
Yes. Some mortgage brokers and banks will pick them up for you, though, so ask. It never hurts to ask.
It makes sense to refinance your mortgage only if you need to take money out of the equity of your home, you need to afford a smaller payment, or take someone else off the mortgage due to a separation or death.
If you can get an interest rate as low as a point, the difference could mean $ 50.00 to a few hundred dollars a month in your mortgage payment depending on what your balance of your home is.
Closing costs are always negotiable. If your bank is not co-operating, get two other opinions from two other banks.
The best way to do this is to go through a Mortgage broker. They will pull your credit only once and shop the rate for you preserving your credit rating. They will also shop your loan with wholesale lenders which may save you money. According to the National Credit Bureau, a credit pull twice in a month for something such as a mortgage will only register as one pull.
If your try to do this yourself, and let each bank you visit do this, each bank WILL pull your credit and your credit score will go down as a result. Do NOT shop for a loan online. These mortgage companies will throw your SS# at 20 different lenders and they will ALL pull your credit at the same time destroying your credit in the process.
Always get a second or third opinion on such a major financial decision such as this.
The market is so tough right now banks and Mortgage Brokers are competing hard for any business.