How to Save on Mortgage Refinance Fees Easily
Refinancing your house is sometimes the best thing you can do for your finances. A home refinance is when you take out a fresh mortgage using your total principal and the current mortgage percentage rates.
If those percentages for mortgage loans are lower than when you first bought the house, you could pay less overall for your last stretch of principle. That means lower interest payments and often highly favorable terms. You also reset the timer on your loan term, meaning a shorter completion or more time to pay off the house.
However, refinancing your house isn't a free transaction. Closing one loan and opening another is bound to come with fees. DoNotPay can help you manage home to your best benefit.
What Are the Fees of Refinancing a Mortgage?
When you make when the mortgage rates are good, what fees are you signing up for? Refinance fees can take a homeowner by surprise if they are expecting a smooth financial changeover.
In reality, refinancing your home is a lot like buying it all over again–at least as far as the bank is concerned. You need to pay for the following:
- Application Fee
- Appraisal Fee
- Attorney Fee
- Title Search and Insurance
The first fee to deal with is the application fee. This is the cost just to submit a request to refinance your home. Ultimately, you are applying for an all-new loan based on your current income, financial status, and principal ownership of the house. The application will then be processed by your bank and you'll hear back whether they accept your application to refinance. Yes, they take the application fee whether they approve the application or not.
An appraisal is how the bank decides the monetary value of your home. This is not the same as market value, which can change based on whim and style. The appraised value of the home includes the land, structures, usable space, quality and age of the features, and other hard value determinations. An appraisal is necessary to properly value your home during a refinance. However, it is also a specialized type of inspection.
Most appraisers charge the homeowner between $300 and $500 for an appraisal.
In some states, all real estate and/or loan documents must be reviewed by a lawyer before they are finalized. You may need to calculate for the brief services of an attorney to officiate your refinance loan contract and verify the terms are legally binding. Attorney fees vary widely from state to state.
Title Search and Insurance
The title search and insurance cost is the single most necessary part of the process. Every home ownership matter, including mortgages and refinance, requires a title check. Doing so comes with a cost based on your local county and ensures that the property is in good standing to be bartered and refinanced.
Together, these refinance fees are often called "Closing Costs", typically comprising 2% - 3% of the loan balance that can sometimes be stacked into the amount covered by the loan.
Which Refinance Fees are Negotiable?
How can you reduce your by negotiating good prices? That's a great question. In real estate, negotiating is often a good way to save a few hundred or thousand dollars.
- Appraisal Fee
First, you can find an appraiser at a reasonable price. Appraisals are pricey, but you don't always have to accept the appraiser recommended by the bank. In many situations, you can hire a third-party appraiser at a better cost. Just be sure to verify their credentials.
- Attorney Fee
Attorney fees are very different from state to state, and sometimes from attorney to attorney. Some charge half your salary for a day of work, some will trade a fair rate per hour of legal oversight your refinance needs. You can often find an attorney willing to negotiate or who offers the services you need at a better price.
- Closing Costs
Myriad closing costs - especially those charged directly by the bank - can be negotiated when working on your refinance terms.
How to Lower Your Refinance Fees on Your Own
If you want to lower your refinance fees, you're going to have to negotiate. This is an ancient art of haggling and just asking for what you want. Many people start just by asking their loan officer if there are ways to lower the costs. Some haggle every step of the way. You can ask to include your closing costs in the loan amount. You can also find a low-cost alternative to hiring an in-person attorney for a few hours. Often all you need is a little legal oversight to confirm the legality and finalize the loan documents.
However, if you're not a natural negotiator, it may be helpful to work with a team who can negotiate on your behalf for lower fees that might influence the next 15 years of your life.
Next Steps to Lower Refinance Fees if Negotiating Didn't Work
Sometimes, you ask for lower fees and better rates, but the answer is "no". This can happen when a lender is drawing a hard line or when your loan has reached certain regulation boundaries. However, there's no need to pay inflated refinance fees if you know they're more inflated than they need to be.
If your refinance closing costs are riddled with unnecessary fees, DoNotPay can help you fight, dispute, or waive fees that should not be part of your refinancing contract.
How You Can Use DoNotPay to Appeal Fees
- Search "appeal fees" on DoNotPay, choose the Fight and Waive Fees product, and select the type of fee you want to appeal.
- Select the merchant you want to appeal fees for and enter the details of your transaction, including an associated account if you have one.
- Submit your case! DoNotPay will generate the best argument for your case and make sure your fee waiver request gets sent to the merchant for processing.
Why Use DoNotPay to Lower Refinance Fees
DoNotPay is an online service that specializes in making everyday tasks as easy as they should be. Getting your home refinanced should save money. Exorbitant fees can quickly defeat that purpose.
Let us help you make homeownership more affordable. We can help you dispute refinance fees, decrease property taxes, or lower your mortgage payments based on your current financial goals and situation.
DoNotPay Can Get Back Fees From Any Company With the Click of a Button
DoNotPay can help you fight and waive fees from various entities.
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What Else Can DoNotPay Do?
What else can we do to make your life a little easier and more affordable? Here are just a few more of our many services that might be useful during your property financing experience.
- Reducing Property Taxes
- Notarize Any Document
- Get Standardized Legal Documents
- Create Passport Photos
- Appeal a Banned Account
- Contact Embassies and Consulates
- Discover and Apply for Scholarships
- Airline Flight Compensation
- File a Complaint
If you are ready to refinance your house, but not for a mountain of refinancing fees, DoNotPay can help!