Question by Edison: Are the closing fees to refinance a house the same as the initial closing fees when I first bought the house?
We have been in our house for about a year now. We own about 250K on the mortgage. One year ago when we got in the house the closing fees were about $ 7,500. I am about to refinance now the closing fees will be about the same as when I bought the house. Is this normal? We have an FHA loan and are doing the governments FHA Streamline refinance. Thanks for the help.
Answer by Judy
Many of the fees will be the same – appraisal, for example. Points can be higher or lower. You wouldn’t need an inspection, and won’t have prepays on taxes.
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Yes. There will be precious little difference in closing costs each time you refinance. You need the same things, such as title insurance and search as well as brokerage fees for obtaining the mortgage for you.
Refi’s often have lower closing costs than when you purchased the home originally. Especially if you are doing a FHA streamline refi. Those costs will be almost 1/2, because there isn’t a appraisal and the title insurance fee’s are cheaper with a short term rate.
My son just did a streamline FHA refi through Quicken loans. For a $ 350,000 refi his costs were around $ 3500, about half of what they were when he purchased the house 8 months ago. He lowered his interest rate from 6.25% to 4 7/8%. Again his costs to refi were about half.
Sounds like your lender is ripping you off. I would get a quote from Ditech and Quicken. Quicken approved him within 3 hours after he completed his online loan application and locked in the rate and closed in less than 30 days. Also, no money out of his pocket.