What is the average cost of closing on a home refinance loan and why is it so high? I being charged $6500!?

My credit rating is 581, is this why??





4 thoughts on “What is the average cost of closing on a home refinance loan and why is it so high? I being charged $6500!?

  1. An average figure would be meaningless. The cost depends on many factors, such as legal fees, stamps, title insurance, whether the loan includes points, prepayment penalty on the old loan, etc. You can ask for a complete breakdown of all costs before you sign anything. If any part is not clear, ask to have it clarified. Some items are required by law, some by the lender, and some may be optional. If the loan is for $ 50,000, the amount is too high. If it is for $ 500,000 it may be very reasonable.

  2. Most of the refinance charges vary with the size of the loan. There are a lot of people that have to get paid, and not all of the closing costs are really “costs”.

    You have the bank charges, and these can vary from zero to 2% of the loan.

    Then you have “prepaid” items, including interest to the end of the month, and the amount they want to hold in the escrow account to pay your taxes and insurance when due; these can be several thousand dollars, but that’s still your money, even after closing.

    Then you have the attorney fees, including the title search and title insurance, and filing in the Land Records, and probably plus the cost for the closer to send the docs back in the overnight mail.

    Your credit score impacts the loan availability and the interest rate, it doesn’t impact the closing costs so much.

  3. Closing costs vary greatly by lender. There are some that are fixed figures, but the rest is tied to the loan amount.

    Shop around a bit, ask for a truth in lending good faith estimate of closing costs. And don’t stop there. Ask about transaction fees, pre-payment penalties, late fees – anything that could also cost you money down the line.

    Make sure you are comparing apples to apples before you sign on the line.

  4. HAHA, your Lucky to even have a loan especially the way the market it is.

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