Don't escrow taxes and insurance. Unless you're undisciplined, avoid putting monies in escrow to cover your property taxes and homeowner's insurance. There's usually a fee for this privilege that runs under 1 percent of the loan amount, in states where it's allowed. "Paying the fee will allow you to time your tax and insurance payments to your benefit," says Bank South's Steve Austin. For instance, you may be able to prepay taxes that are due next year and use those payments to reduce your current tax bill. Moreover, you get to hang onto your money longer. That may be an advantage when interest-bearing accounts start paying more.
If you do not plan on staying in the house very long, refinancing may not be in your best interests.
Weigh the costs carefully of how long you will be staying in your home vs. how much of a savings you will be getting in a refinance. Make sure you include closing costs in your decision.
You can ask for a copy of your settlement cost papers (the HUD-1 form) one day in advance of your loan closing. This will give you a chance to review the documents and verify the terms.
Make sure the new title is correct. The fact is, most people never see their deed before it's recorded at the county court house, says Gumbinger. He recommends that you ask the lender if you can review the title to the property before it gets filed, so that you can make sure it's correct.