Requirements & Costs

When Home Mortgage Refinancing Loan your home, you are most likely to encounter the following charges:

a) Loan Processing Fee: This charge covers the initial costs of processing your loan request and checking your credit report.

b) Appraisal Fee: This is a fee for assessing the value of your property

c) Points: This is the charge paid to the lender for the loan and is linked to the interest rate; usually the more points you pay, the lower the interest rate. The points will vary according to market conditions and interest rates to be charged.

d) Title Search: This covers the charge of examining public records to confirm ownership of the property.

e) Title insurance: Charge to examine the policy that covers the estate.

f) Survey Costs

g) Home Inspection Fees

h) Lender's Attorney's Review Fees and fees for other legal services

i) Prepayment Penalty refers to charging money for an early pay-off of the existing mortgage loan

j) Loan Origination fees: This fee is incurred if you change the type of plan you subscribe to.

k) Document preparation fees

l) Mortgage Insurance

m) Tax service fees.

Some of the lenders may even offer to waive some of the charges such as title insurance, title search, appraisal fee etc. as an incentive to attract prospective customers. In some cases, a lender may offer "no-cost" refinancing, which means most of the processing and closing fees are not required but he may charge a higher interest rate.

Lenders offer different cost, interest rates and terms. Start with your original lender and then contact several more to compare mortgage types, rates, and terms. You can even lower your rate by paying discount points.

Because Home Mortgage Refinancing Loan involves many of the same steps that you followed to get your current mortgage, you may already know what to expect. During the application process, your home will be appraised to determine its value, and the homeowner's credit file will be reviewed. The lender will need many of the same documents you supplied for your first closing such as- Information about your present Mortgage Refinance Loan, such as current monthly payment, outstanding balance, the lender's contact information. You may also be asked for Information about debts and assets, property value, your income and employment details, bank account information, site survey documents, your credit report, status of payments on your property tax and insurance payments.

If the lender is satisfied with your application, it will be accepted. Then the homeowner

signs the new Mortgage and the loan granted will be used to pay off the mortgages and other debts.

BeforeYou Refinance

You need to consider the following things before you Refinance Loan:

• What are the costs of refinancing

• Will I save by opting for refinancing

• Should I go in for Cash out Refinance

• How long do I plan to remaiwn in my home

• Can I afford it • Will my loan period be shortened

• Will the monthly payments decrease

• How many years remain on my existing mortgage Everyday 04_3

• What is the Prepayment Penalty

• Should I go with an Adjustable Rate Mortgage (ARM) or a Fixed–rate loan

• Is there a high–rate loan on the home

• What will happen if I extend the mortgage term

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