How much to refinance?

[ElizK]

I called to see about refinancing my home loan, and the fees they quoted seemed really high! $4500.00!! That includes appraisal, orination fees, points, everything. I've only checked with one place... should I keep looking, or is that about right?

Thanks!

 

[Christine]

I looking at it also and it comes to about $3900 for me. I think that is high also (higher than what I've paid in the past) but I don't see anyway around it.

 

[jel0511]

Remember a point is 1% of the total loan and a lot of your other fees are usually a certain % of the loan amount. If your loan is around 200-250k, I'd guess that amount is right on target. Also look into not paying any points, yes you'll pay a slightly higher rate, but less out of pocket now. You could also look into rolling those costs into the new loan.

 

[ElizK]

Remember a point is 1% of the total loan and a lot of your other fees are usually a certain % of the loan amount. If your loan is around 200-250k, I'd guess that amount is right on target. Also look into not paying any points, yes you'll pay a slightly higher rate, but less out of pocket now. You could also look into rolling those costs into the new loan.

The loan will be more like $120K. They did say they could roll the fees into the loan.

 

[Christine]

My $3900 fee is based on a loan of $165000.00.

 

[daughtersrus]

I called to see about refinancing my home loan, and the fees they quoted seemed really high! $4500.00!! That includes appraisal, orination fees, points, everything. I've only checked with one place... should I keep looking, or is that about right?

Thanks!

Our last refi cost us nothing. Wells Fargo solicited us for a refi. This was before the current problems. We had a store credit card that was processed through them. At first I thought it was a scam but after having my friend (a mortgage broker) check it out, we went with it. We did everything by UPS so we didn't even have to go to a closing.

My friend said that generally, the refi fees are pretty low. Anything above a certain figure (can't remember exactly but it was less than $1,000) is profit. Most of the time, for the broker.

Again, all of this is before the housing crisis so things may have changed. I don't think that it would hurt to ask the broker to break out the fees so that you can do a little research on your own.

 

[Christine]

Our last refi cost us nothing. Wells Fargo solicited us for a refi. This was before the current problems. We had a store credit card that was processed through them. At first I thought it was a scam but after having my friend (a mortgage broker) check it out, we went with it. We did everything by UPS so we didn't even have to go to a closing.

My friend said that generally, the refi fees are pretty low. Anything above a certain figure (can't remember exactly but it was less than $1,000) is profit. Most of the time, for the broker.

Again, all of this is before the housing crisis so things may have changed. I don't think that it would hurt to ask the broker to break out the fees so that you can do a little research on your own.

My mother also got a no-cost refi through Bank of America a few years ago. She had her current mortgage through them and the contacted her about getting a lower rate. She just drove up to the bank in person and signed a few papers and it was done. I've called my current broker and they are not offering any such thing.

 

[Sanchez]

I called to see about refinancing my home loan, and the fees they quoted seemed really high! $4500.00!! That includes appraisal, orination fees, points, everything. I've only checked with one place... should I keep looking, or is that about right?

Thanks!

It is very difficult to tell whether it is high unless we can review the GFE. That said, you should always check with more than one lender.

Make sure that you are not counting tax/insurance escrows and interim interest as fees. They are prepaid items (items you have to pay regardless of the refinance.) Typical fees include:

Loan origination fee (could be 0-1%)
Appraisal ($400-600)
Tax service fee
Flood certification fee
Credit Report
Underwriting Fee

Closing agent fees
Abstract/title search
Title insurance
Recording Fees

Remember, if you pay taxes and insurance through escrow on your current loan you will get back the amount in escrow when the loan is paid off. You will start a new escrow account with the new loan and it will be fuunded at the refi. I understand that you have to come up with this cash at closing (unless your new loan covers it) but it is not a cost of the loan.

 

[bicker]

A lot of places will tell you that they'll refin for nothing, and roll the closing costs into the balance of your loan. So there's really not much to go on, in terms of these fees. If your state isn't totally backward, they require that most of these fees get reflected in the APR, so that's what you can use to compare what you're being offered to other options.

We'll end up paying about $9,000 to close our refi (but that includes a couple of points, funding property tax escrow, and first month's interest, since we're closing midway through the first week of of the month - there are just so many meaningless ways that the number could vary - meaningless because, just looking at these two things, we were going to have to pay those costs someway, even if we didn't refi).

 

[wdwmom0f3]

I called to see about refinancing my home loan, and the fees they quoted seemed really high! $4500.00!! That includes appraisal, orination fees, points, everything. I've only checked with one place... should I keep looking, or is that about right?

Thanks!

Keep looking. I am in the process of doing this myself and right now I was quoted about 2200.00 with no origination fee, with Wells Fargo. I can give you the phone number if you need it. I am going with a 15 year at 3.875.

 

[Christine]

Keep looking. I am in the process of doing this myself and right now I was quoted about 2200.00 with no origination fee, with Wells Fargo. I can give you the phone number if you need it. I am going with a 15 year at 3.875.

I was quoted 3.67 on a 15 year mortgage (but higher costs). The 30 year rate was at 3.87.

 

[ccgirl]

Lower credit scores will drive up the closing $$ needed along with the rate. You should look elsewhere. See if they will quote the fees without pulling your credit report though as too many inquiries will lower your credit score. Good luck.

 

[tvguy]

Shop around. There are lenders who will do no fee, no point refinances. I do, however think, you have to have a certain percentage of equity in your home to qualify, and of course decent credit to qualify. And I don't think you can take any equity out.

 

[ElizK]

Thank you for all the great info. That is very helpful! With my credit we'll be able to get a really good rate. I'll look around some more to see if I can find something better.

Thanks again!