Mortgage Refinancing Penalties

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How to avoid mortgage refinancing penalties

People frequently make bad decisions when choosing their mortgage refinancing schemes. One of the gray areas for this type of deals is the monetary penalties involved. A no-mortgage refinancing penalties are hard to realize, but you sure can cut down the financial backlash. Start with the hidden costs that your lender may not care to disclose to you.
Closing Costs
Closing costs are part of the mortgage refinance process. Although these are normal components of mortgage loans, there’s a good chance they can be waived in refinance loans. You can just inquire of any special deals sometimes offered by the lenders and our special promotions. Make sure you double check all your mortgage refinancing penalties with your mortgage lender prior signing up for a new mortgage.
Prepayment Mortgage Refinancing Penalties
Mortgage refinancing borrowers have a huge hurdle to face in the form of prepayment penalties. Paying off your current mortgage can cost you thousands of dollars in useless expenses. For lenders, a borrower who makes a one-time payment beyond 20% of the outstanding balance allows them to apply the prepayment rules of the mortgage contract. One option to avoid prepayment penalties is refinancing not with another lender but with a borrower’s current lender who may be able to reduce or even waive the penalties.

Depending on the lender, you might get more surprises along the way. You can count in amortization, relocation and other sorts of additional fees which they may be hiding.

More Hidden Costs

Right from the beginning when you see the appraising team, you must be asking questions about hidden fees. Here are points where you might find them.

  • Appraising Team – Latest estimates of place home value appraisals cost the borrower up to $500. If the house has been bought recently, show the appraisal file for them to use it instead.
  • Property engineer or inspector – For pest inspection. It may you cost up to $300.

Even with all these mortgage refinancing fees and costs, don’t panic. We are on your side, requiring your lender to present to you all the financial details of the refinance before finalizing the loan. This way no more surprises will be coming.  

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