Closing Costs? What are They?
by Katheryn W. Hofer
One of the astonishing expenses for most first home buyers is the total closing costs. It is important to understand these fees, especially if you are considering re-financing your home, since any savings on a new rate may disappear once you have to pay the closing costs on a new mortgage.
When a bank establishes a mortgage, it incurs expenses to do so. A lot of these expenses are not under the control of your lender, since they are charged by third parties, but there are some fees that they do control, and will adjust if they really want your business.
The following is a list of closing costs: -Application fee -Origination fees (or points) -Attorney fees -Transfer taxes -Recording fees- -Appraisal -Surveys and
Or more, depending upon the province.
One of the first questions you may ask is whether or not you can reduce these costs. Often banks may make special offers to entice borrowers to take a loan with them.
Make sure you get a good faith estimate of the closing items, since this is required by law. Examine this carefully and you may be able to find some fees that can be negotiated. Be attentive to a loan package that has a great rate, but is over-stuffed with closing costs edmonton mortgage rates. The bank is getting some of the interest back up front.
You can get closing estimates from other banks as well, and make a comparison between each item alberta mortgage rate. If some of the fees seem especially high, your bank may be inflating the fees. As examples, the fee for a credit check should be fairly standard, and within the same geographic region, there should not be too much difference in appraisal fees. You can bring these discrepancies to your bank’s attention and ask for reductions to the norm.
Now you are familiar with how much your closing costs are going to cost, and you have made some negotiations in reducing them, you can figure out if refinancing is really going to be worth while by using an online mortgage calculator to find out the costs left on your present loan.
Now compare your existing home loan total cost balance against the new loan’s total costs, adding the closing costs to your new loan. Now you will know whether the lower rate is worth while. You will discover that this exercise is well worth the time and trouble.
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