How to Achieve Free Mortgage Refinancing?

Answer 1

One thing that many people should consider is refinancing their mortgage. One of the great benefits of such a refinancing can be the ability to covert some of a home�s equity into money can be used to pay for something else. It can also lower the rate charged for the mortgage.

However, mortgage refinancing is typically not free of costs. Different expenses a person could incur while trying to refinance can include things like closing costs and prepayment penalties. If a person is not careful, the costs that it takes to refinance a mortgage can quickly add up. If a person is low on money to pay for these costs, this can become a significant problem. Thankfully, there is actually a way to refinance a mortgage for free. To do so, simply use the steps below.

First, you should go over the documents for your old mortgage. Examine them carefully. Look for something called a prepayment penalty. If your mortgage has one, the refinancing of this mortgage may result in a fee. However, prepayment penalties do eventually expire. After that expiration date, you can refinance and avoid any such fees.

The second thing you will need to avoid is closing costs. Contact your mortgage lender and ask him or her to cover the closing costs for you. Argue that you don�t have the money to pay for these closing costs as a negotiating tactic to get the lender to pay for them instead. You may be able to accomplish this in exchange for something else. Usually, it would be in exchange for a steeper interest rate charged on the new loan.

A third option you may want to consider is including the costs as part of your new balance. This may need to be done if the lender refuses to cover the closing costs for you. However, if that does occur, there may still be the possibility of rolling the different costs into the balance of the new mortgage. This is one way a person can avoid all out of pocket expenses when refinancing.

Taking fees and wrapping them into the new loan�s balance will increase the new refinanced payments. However, this won�t be as bad as it seems. The costs that are rolled into the new loan will actually be stretched out over a period of more than 30 years. Small costs stretched out over such a long period will result in a minimal increase in each payment.