Carefully review the estimated closing costs. If you decide to lock in the rate, the lender will send you a "good faith estimate" of your closing costs within three days. Go over the numbers carefully, and compare them to the ones that appear on the final settlement statement (the HUD-1) from your previous mortgage.
When lenders offer a "no-cost" loan, they may include a prepayment penalty to discourage you from refinancing within the first few years of the loan. Ask the lender offering a no-cost loan to explain all the fees and penalties before you agree to these terms.
Fees are a hidden cost of many mortgage loans. By law, lenders must disclose fees within three days of a loan application. Fees can go by many names like - document prep fees, courier fees, administrative fees, and more.
Before you refinance a loan, make sure that you carefully analyze any fees that your lender is including on the loan. The Department of Housing and Urban Development can provide you with a list of standard fees. Use it to make sure that your lender isn't tacking on anything extravagant. And by all means, compare their fees with other lenders in the market.
When you do a cash-out refinance you are leveraging the equity in your home in order to receive a lump sum of cash at closing. Many individuals and families use this type of loan if they want to remodel their home, or they have kids that are attending college soon. Veterans and other military personnel can now take advantage of a 100% cashout refinance thanks to the Veterans Benefits Improvement Act of 2008.
