When you are refinancing a Mortgage loan, can you avoid paying Closing Costs?

If so, how do I avoid paying closing costs. I want to refinance my home but I don't want to put down that large of amount of money right now.

jaimestarr79 said:

Depends on where you go, how good your credit is. If you don't have the money up front, you can just add into your financed amount.

jaimestarr79 said:

i just used google and found over 2,000 entries.

cheers!
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jaimestarr79 said:

You need to tack any costs onto your loan balance and/or pay a higher interest rate for a "no cost loan". Assuming you have enough equity, it shouldn't be a problem.

You will pay at least some service charge (which is what closing cost is). But they can roll it into the financed amount without any problem as long as you have enough equity. In fact, they often do it automatically.

Just ask your lender.

jaimestarr79 said:

The first question you need to answer is how long will you be in the house? Then ask your lender to calculate how long will it take you to pay off the new closing costs at the new mortgage payments, If you aren't going to be in the house long enough to recoup the closing expenses, it's not worth refinancing. Also, be sure to get a comparative market analysis to confirm the appraised value of your home.

Thank you guys for your responses!

I was wondering if closing costs are like a destination charge they try to put on you when you buy a car. often they throw this charge on you at the last minute before you drive off the lot. This is often put on after you have already negotiated the final price.

I have never paid a destination charge in my life. I learned back in the day that a destination charge is just a bullshit charge the car dealership throws on the ticket price of a car just to make extra money.

I guess my point is, Can you negotiate how much closing costs you are willing to pay? ARe closing cost negotiable?

jaimestarr79 said:

They aren't negotiable, exactly. It's more a matter of moving the costs around (paying slightly higher interest rate, for example).

What you can do, though, is shop around for a mortgage. Different mortgage lenders charge different closing fees.

jaimestarr79 said:

My two cents is NOT to refinance... you may lose your house if you don't pay the loan back on time.

pplrain said:

That has to be one of the more asinine replies I've ever seen. If you don't make your payments, you're going to lose your house whether you refinance or not!

Refinancing a mortgage from a higher to a lower rate makes it easier to repay the loan - because the monthly payment goes down. As SCNDLS said, the major consideration is whether you will live in the property long enough to recoup the costs of refinancing.

jaimestarr79 said:

Closing costs are the expenses that the lender has to pay to process your refinance. They cover the costs for an appraisal, flood certificate, legal fees, filing fees, and their internal processing fees. You can't get away from them but they vary because different lenders use different companies to perform these tasks. Now, you can negotiate with some lenders not to pay closing cost but that usually means that they're gonna charge you a higher origination fee or point, so either way they're gonna get their money.

jaimestarr79 said:

1. Find a company that has no closing cost or
2. The closing cost are rolled into your loan so there is no money out of your pocket.

Graycap23 said:

But be aware, that if you roll them in you're gonna pay interest on that too. So if you have the cash pay it OR find a loan with ZERO closing costs. Yes, you'll get a higher origination fee but points are tax deductible.

Genesia said:

I am sorry I misread the question... I thought you were taking out a second mortgage on your house.

Graycap23 said:

aren't closing costs negotiated on your current loan, which you want to refinance ? Hence you can't go look for a company that doesn't have closing costs ...

BlueZebra said:

The closing costs on an existing loan don't have anything to do with getting a new loan with another company.

SCNDLS said:

ok, I thought refinancing a loan meant closing one by buying another (from the same or another company) under more interesting conditions. Here, closing a loan costs extra because you end the loan before the term ended. I guess closing costs have a different meaning in the US ...

BlueZebra said:

Okay, now that's something called a prepayment penalty here. Which means that if you pay off the loan early before some predetermined period, either with your own dough or by obtaining a new loan from another company, the original mortgagor will charge you a penalty. Some loans DO have this so before anyone refinances they need to make sure they won't be charged a penalty.