Overview of Refinance Rates for Home Loans
Refinance rates are the costs associated with refinancing mortgages. The process requires borrowers to take out a new mortgage and undergo the same type of loan process that occurred when entering into the original loan.
Refinance rates vary based on lender criteria and borrower's payment history and credit score. Fees can be as little as a few hundred dollars to several thousand. Banks often assess fees for loan application, loan origination, home inspections, property appraisals, lawyer review, and closing settlement costs.
One consideration of mortgage refinance is determining if the current loan includes prepayment penalties. Banks often assess a penalty when borrowers pay off loans early. Some banks assess prepayment penalties during the first 5 years of loan origination while others assess penalties throughout the duration of the loan. When penalties are assessed they typically amount to 2- to 4-percent of the principal balance.
It can be beneficial to consult with a mortgage specialist to determine if refinancing is the best financial option. The standard recommendation is to enter into refinancing only when interest rates can be reduced by 2-percent or more.
It is wise to shop around and compare mortgage lenders. Two credible sources include MortgageLoan.com and BankRate.com. Both organizations provide links to nationwide lenders, along with current interest rates, refinance rates, and consumer ratings.
BankRate provides online mortgage calculators to help visitors compare costs vs. savings of mortgage refinance. Homeowners can enter principal loan balance, current interest rate, property tax rate, homeowner's insurance premiums, appraised value, and number of remaining payments.
Once information is entered, a report is generated providing estimates for refinanced mortgage principal, interest, and closing costs. This is a great tool for helping borrowers determine potential savings and estimating refinance rates.
Borrowers who elect to commence with mortgage refinance should contact the selected lender to obtain an estimate of anticipated fees. Banks will review homeowner's current loan and provide a good faith estimate of closing costs. Bank estimates do not include expenses incurred by third-party providers such as property inspections and appraisals.
Most lenders require borrowers to obtain real estate appraisals to determine current market value and ensure they do not provide more money than the house is worth. Banks will sometimes include appraisal fees in refinance rates, while others require borrowers to pay expenses out of pocket.
On average, appraisals cost between $300 and $700. Most banks permit homeowners to obtain a broker price opinion which is conducted by a real estate broker. These reports are an 'opinion' of the value and are a good alternative to traditional property appraisals.
Home inspections are normally required to evaluate property condition. The average cost of home inspections ranges between $150 and $400.
Other costs that homeowners might be responsible for include property record search, title insurance, flood monitoring and certification, survey fees, and loan points.
The process refinancing can be somewhat cumbersome, but if borrowers can shave several thousand dollars off the overall cost of the loan the process is worth the effort.
Homeowners who are uncertain about mortgage refinance rates may find it helpful to consult with a mortgage specialist or housing counselor. Those in need of help can obtain complimentary counseling through the Department of Housing and Urban Development. HUD publishes a list of national housing counselors at HUD.gov.
Refinance rates vary based on lender criteria and borrower's payment history and credit score. Fees can be as little as a few hundred dollars to several thousand. Banks often assess fees for loan application, loan origination, home inspections, property appraisals, lawyer review, and closing settlement costs.
One consideration of mortgage refinance is determining if the current loan includes prepayment penalties. Banks often assess a penalty when borrowers pay off loans early. Some banks assess prepayment penalties during the first 5 years of loan origination while others assess penalties throughout the duration of the loan. When penalties are assessed they typically amount to 2- to 4-percent of the principal balance.
It can be beneficial to consult with a mortgage specialist to determine if refinancing is the best financial option. The standard recommendation is to enter into refinancing only when interest rates can be reduced by 2-percent or more.
It is wise to shop around and compare mortgage lenders. Two credible sources include MortgageLoan.com and BankRate.com. Both organizations provide links to nationwide lenders, along with current interest rates, refinance rates, and consumer ratings.
BankRate provides online mortgage calculators to help visitors compare costs vs. savings of mortgage refinance. Homeowners can enter principal loan balance, current interest rate, property tax rate, homeowner's insurance premiums, appraised value, and number of remaining payments.
Once information is entered, a report is generated providing estimates for refinanced mortgage principal, interest, and closing costs. This is a great tool for helping borrowers determine potential savings and estimating refinance rates.
Borrowers who elect to commence with mortgage refinance should contact the selected lender to obtain an estimate of anticipated fees. Banks will review homeowner's current loan and provide a good faith estimate of closing costs. Bank estimates do not include expenses incurred by third-party providers such as property inspections and appraisals.
Most lenders require borrowers to obtain real estate appraisals to determine current market value and ensure they do not provide more money than the house is worth. Banks will sometimes include appraisal fees in refinance rates, while others require borrowers to pay expenses out of pocket.
On average, appraisals cost between $300 and $700. Most banks permit homeowners to obtain a broker price opinion which is conducted by a real estate broker. These reports are an 'opinion' of the value and are a good alternative to traditional property appraisals.
Home inspections are normally required to evaluate property condition. The average cost of home inspections ranges between $150 and $400.
Other costs that homeowners might be responsible for include property record search, title insurance, flood monitoring and certification, survey fees, and loan points.
The process refinancing can be somewhat cumbersome, but if borrowers can shave several thousand dollars off the overall cost of the loan the process is worth the effort.
Homeowners who are uncertain about mortgage refinance rates may find it helpful to consult with a mortgage specialist or housing counselor. Those in need of help can obtain complimentary counseling through the Department of Housing and Urban Development. HUD publishes a list of national housing counselors at HUD.gov.