Welcome!




Expand Your Education with These Courses from
Time Management: Skills for Sales Success: Part Two.
The Psychology of Consultative Selling: Skills for Sales Success: Part Four.
Territory Management: Skills for Sales Success: Part Eight.
Expand your education through NAR's REALTOR® University: A Consumer Advocate Approach to Mortgages: Course 2.
BPOs: The Agent's Role in the Valuation Process.

Real Estate Q&A: No-Cost Refinancing Actually Costs Something

Have a comment on this article? Share on Facebook!

By Gary M. Singer

refinance_house_cart(MCT)—QUESTION: I am refinancing my mortgage and was told there were no out-of-pocket costs. Now as we approach the closing, the lender wants me to pay several hundred dollars. What’s the deal?

ANSWER: When you get a mortgage loan, you often have the option of adjusting the interest rate by either paying discount points for a lower rate or receiving money back in return for a higher rate. In a refi with no out-of-pocket costs, you actually are receiving a premium back from your lender in exchange for a slightly higher interest rate. This premium is being used to offset your closing costs.

Because some of these costs are based on your individual situation, you might have to bring a few hundred dollars to closing to balance everything out. Some of the fees being charged to you have to match what you were promised in the beginning, such as the state transfer taxes and the bank’s origination charge. Other fees, such as the appraisal and title insurance, can’t increase by more than 10 percent.

Finally, other charges, such as your land survey and homeowner’s insurance, can change without limitation to reflect their actual cost. You have to be an educated consumer, even if your loan was advertised as no cost to you. You should talk with the closing company to see if you can get any credit for showing an old survey or submitting the title insurance policy that you got when you bought the home. As with any transaction, shop around and negotiate prices with all the vendors.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

©2013 Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.




Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>