Mortgage : Home Loans : Refinance : Home Equity Loans

By Ben Afzal

Basics

When you apply for a mortgage you should receive within three days a “Good Faith Estimate”. This is a written estimate, not a guarantee of fees.

The good faith estimate may list more than 20 different kinds of fees.

These are the costs associated with purchasing a property or refinancing one.

These closing costs are to compensate all the different parties involved in the process, which may include:

• appraiser
• lender
• escrow
• title
• insurance
• brokers

This is usually a complex transaction, as you can see from the large amount of paperwork you will need to sign whenever you do a real estate related transaction. There usually isn’t a way to avoid having all these parties involved.

No Closing Cost Option

The no closing cost option is offered by many different lenders or brokers. What this means is that all of these charges are included in the loan.

You are still paying these costs, you are just not paying them up front or out of pocket.

For many borrowers this can be an out of pocket savings of thousands or tens of thousands of dollars.

You usually get a higher interest rate in exchange for the no closing cost option. This often makes sense for people who have a shorter time frame wtih the property or mortgage. If you plan on keeping the mortgage in the long term you may be better off paying your closing costs up front and getting a lower interest rate and monthly payment.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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This entry was posted on Wednesday, October 11th, 2006 at 2:07 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.