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How to Save Money on Closing Costs When Refinancing—4 Tips

How to Save Money on Closing Costs When Refinancing—4 Tips

Since the year of 2010, the mortgage rates has becoming extremely low, and thus people start to consider to refinance their home in order to get the best deal. Suggested by advises Elisabeth Leamy from ABC News Consumer Correspondent on the ABC website, before you rush to refinance your homes, you should ask yourself and calculate how long it can take for the new monthly payment to make up for the closing cost that you need to pay. To make it a better deal, you will want to keep the closing costs as low as you can.

1. Shop around.

Shopping around is always one of the best way of saving. So before you refinance, shop around to see the various costs that different lenders are charging. Call the lenders and request for quotes, and also let them know that you are looking for the best quote so that they may lower the quote to keep your business.

2. Carefully go over every line items.

When you are refinancing, you will get a settlement statement which has a breakdown of typical fees. If you have an idea about what they are, you will have a chance of bargaining them down. The fees that you can negotiate include the underwriting fee, which is a fee indicating the risk that lender takes to do business with you, a document preparation fee, which you might object to, and an administrative fee, which is the fee of the previous two lumped together. An appraisal fee is required and standard that you cannot get rid of during refinancing, but you should ask for the receipt because sometimes the lenders inflate this cost on the paperwork.

3. Be aware of your credit score.

You should get a copy of your credit core before you refinance for your home. The credit score reports can be done freely once 12 months from the nationwide consumer credit reporting agencies—Equifax, TransUnion or Experian. Carefully check the credit score reports to see if there are mistakes that wrongly lowered your credit scores, which has an effect on your closing cost for refinancing.

4. Choose no closing costs.

lark Howard, consumer activist from The Clark Howard Show Website, suggests that you may opt for no closing costs instead of paying closing cost to save more money.

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