How to Save Money on Closing Costs for Mortgage Refinance

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By Rio Ann Hessler
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home refinance

There is a wave of mortgage refinances, and many people that bought a home within the last five years are taking advantage of the lower interest rates environment. However, there are closing costs associated with getting a new loan on your home.

Here are some ideas on how to avoid paying the Mortgage Tax and on how to save money on other refinancing costs.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

mortgage assignment
home appraisal
internet
lowest costs

Step 1

home refinance

You can avoid paying the mortgage tax on a refinance by getting a Mortgage Assignment from your current lender. This will allow you to legally not pay mortgage tax again on your property. Some States require the home owner to pay a mortgage tax on a refinance. If you live in one of these States, avoid paying this tax by getting a Mortgage Assignment from your lender.
Step 2

home refinance

In addition to avoiding paying the mortgage tax, you get a thorough Home Appraisal instead of a drive by appraisal. This will allow you to save money on the refinance. A thorough appraisal may yield a better value for your home, relieving you from having to put more money down on your refinanced loan. The real estate market has gone down considerably in some parts of the country.

Some lenders are requiring that the home owners put additional money down to compensate for the lost value, avoid this by getting a thorough appraisal before refinancing.
Step 3

home refinance

Shop around for refinancing interest rates. All banks are not created equal, some banks and financial institutions charge higher rates than others. Normally, the smaller Community Banks and Credit Unions are more consumers oriented and charge lower rates.

Shop around on the internet and compare interest rates and points vs. no points before you refinance. Watchout for embeded points included in the closing costs. Some lenders will include points in the closing costs without specifically quoting these costs as points.