Mortgage Refinance What Are All Those Closing Costs

Mortgage Refinance – What Are All Those Closing Costs?
Some people who decide it’s time for a​ mortgage refinance aren’t prepared for the​ closing costs associated with the​ loan .​
They think that they’ve already paid closing costs and all the​ other fees associated with the​ purchase of​ the​ house,​ so they’re surprised to​ find that many of​ these same costs pop up again when it’s time for a​ mortgage refinance .​
What are these costs? And which can you​ expect to​ pay again?
The amount of​ time that’s passed since you​ took out your original loan will have some impact on​ the​ cost of​ your mortgage refinance,​ but time isn’t the​ only factor that can make a​ difference .​
Take a​ look at​ the​ typical home appraisal .​
As a​ rule,​ a​ lender wants this document so that he can prove to​ his superiors that the​ property is​ worth at​ least as​ much as​ he’s agreed to​ loan you​ .​
Remember that banks aren’t typically in​ the​ real estate business .​
If you​ should default on​ the​ loan,​ the​ lender wants to​ know that he can recover at​ least the​ majority of​ the​ loan by selling off that property .​
That’s why a​ current appraisal is​ often required for a​ mortgage refinance .​
Property values fluctuate and other changes impact the​ final dollar value an​ appraiser will attach to​ your property .​
You may even have made some changes that will affect the​ value .​
Have you​ added floor space by building on​ a​ room or​ even boxing in​ attic space for a​ bedroom? That can increase the​ value of​ your home .​
If you’ve done major renovations or​ even added a​ pool,​ you​ may have raised the​ value of​ your property and the​ appraisal will reflect those changes .​
Remember that you’re likely going to​ be limited to​ some percentage of​ the​ value of​ your home – probably 80 or​ 90 percent .​
If the​ appraisal shows that your property is​ now worth more than when you​ bought it,​ you​ may be eligible for a​ larger loan or​ better terms .​
You’ll also likely pay closing costs for taking out a​ mortgage refinance .​
The lender is​ charging you​ for rewriting the​ loan,​ going through the​ steps and creating the​ paperwork .​
The lender may also run an​ updated credit check .​
This could also help you​ if​ your credit has improved over the​ course of​ your loan .​
You may now qualify for better rates and terms than when you​ took out the​ original loan .​
Some people even use that status change as​ a​ reason to​ seek a​ mortgage refinance.

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