Mortgage Refinancing

Home mortgage rates are currently near historic lows and have remained at these low levels for several months. As the result, many people are eager to refinance their current mortgage loan to lock in a low rate. For those in an adjustable rate mortgage, timing may never get any better to refinance out of this mortgage product and into a more conservative and consistent 15 or even 30 year mortgage loan.

When deciding to refinance a home mortgage, be sure to understand the refinancing costs associated with doing so and then try to limit them as much as possible.

Refinancing an existing mortgage is very similar to securing an initial mortgage. In fact, your new mortgage will be used to pay off your existing one, so it is just like buying your home all over again. As such, there are certain costs associated with a refinancing, just as there was when the original mortgage was secured.

Closing costs such as broker fees, appraisal fees, title search, inspections, and various administrative fees are all part of the fee structure associated with a mortgage refinance.

To reduce your closing costs and any other mortgage-related fees, trying following these simple tips:

1. Try to refinance with your existing lender. They will want to keep your business and if they know you are looking to refinance, they will be motivated to offer the lowest rate possible and reduce your fees to keep you onboard with them.
2. Take a look at your credit report to ensure there are not issues you are unaware of that might detract from you score. A high score will help you secure the lowest possible interest rate and this could save you thousands over the term of your loan.
3. Do not hesitate to negotiate your fees. Many mortgage-related fees are controlled by the mortgage company so they have the ability to lower them. "Administration fees" are especially easy to get waved or reduced.
4. Ask your lender to wave your first month's mortgage payment. Depending on your circumstances and type of loan, this is certainly a possibility.
5. Avoid having your closing costs included in your loan balance. Sure, this is a great way to avoid them altogether but the reality is that you will by paying for them each month during the length of your loan and with interest included, you will end up paying a lot more in the long-run than if you had just paid them out of pocket up front.