Closing a Refinance Loan
What happens at closing
When you bought your home you went throught a similar closing process, so it may be familiar to you. The process is basically the same. You will work with the closing agent that will have a stack of papers for you to sign. The closing agent will give you a simple explanation of each paper, you should take time to read and understand everything you are signing. Ask lots of questions and never sign anything you don’t understand.
Before closing, your lender will give you paperwork explaining the closing costs, a "good faith estimate". The good faith estimate will also "estimate" how much cash you will need to pay at closing. If you have not received these items, be sure to call your lender BEFORE you go to closing.
You will need to bring a paid copy or your homeowner's insurance policy or a binder. (Your lender can help you with this) The closing agent will then be able to tell you exactly what your closing cost are. You may not need to pay these costs up-front when refinance because they can be included as part of your loan.
If you have chosen an FHA loan for your refinance--FHA has no minimum cash investment requirement on a refinance loan. Closing costs for refinancing are typically included in the new loan amount, so you probably won’t have to bring any cash to closing. You do have the option of paying your closing costs in cash. If you choose this, let the closing agent and lender know that in advance.
If you are doing a "cash out" refinance, the closing agent will give you a check at closing.
Typical closing costs include:
* Loan origination fee
*
Discount points
*
Appraisal fee
*
Credit report
*
Inspection fees
* Accrued interest
*
Mortgage insurance premiums
*
Hazard insurance premiums.
* Escrow account deposits: (escrow account for taxes and/or insurance and other items)
* Title charges: (services performed by title companies and others)
* Government recording and transfer charges
* Termite inspections, surveys, etc.