How to Pay Less Refinance Closing Costs

Refinance closing costs are going down as much as 7% nationwide according to one lender’s recent survey. Mortgage rates are still at historically low levels making the most important aspect of refinancing (that you control) the fees you pay. Here are several tips to help you pay less refinance closing costs and get the best deal on your next home loan.

How Much Are Typical Refinance Closing Costs?

The mortgage fees you pay and how much depends on where you’re living and what kind of home loan you choose. Every mortgage loan has fees and refinancing is no exception. There are so-called no fee refinance offers out there but you’ll always be trading higher mortgage rates for the lender paying your loan origination fee and other closing costs.

The survey I mentioned claims that on average closing costs are down 7% from the previous year nationwide. It’s worth noting that the same survey had closing costs up 37% the year before thanks to new government regulation.

How much you end up paying when all is said and done depends on the state you live in along with the amount of your loan. If you live in a high-cost state like New York, California, or Maryland you can expect to pay more at closing than someone in Missouri which had the lowest average closing costs.

Some states like Florida levy a tax on all mortgage transactions driving up cost. Here are the top 5 most expensive states when it comes to refinance closing costs:

  1. New York where closing averages $5,435
  2. Texas where closing averages $4,619
  3. Pennsylvania where closing averages $4,467
  4. Florida, closing averages $4,395
  5. Oklahoma where closing averages $4,352

Which states have the lowest closing costs?

  1. Missouri where closing only averages $3,006
  2. Kansas, averaging $3,193
  3. Colorado where closing averages $3,193
  4. Iowa, averaging $3,257
  5. Arkansas where closing averages $3,325

Across the country refinance closing costs average $3,750, just shy of 2% of the home loan amount. Most brokers quote an outdated “rule of thumb” that closing costs should be 1.50%. There isn’t a state in the Union that came in close to 1.5% in the last survey.

How to Pay Less Refinance Closing Costs

The good news is that some of the mortgage fees you pay when refinancing are negotiable. The most commonly overpaid refinance closing costs include the loan origination fee and discount points, all negotiable. Loan origination is the fee paid to the person or company arranging your loan. I’ve seen origination fees as low as $400 with community credit unions or as high as 2%.

The less you pay for loan origination the better off you’ll be. If you don’t have cash to pay the originator you could accept a higher mortgage rate in exchange for the lender paying all or part of your closing costs. Don’t be afraid to haggle with potential brokers and lenders over loan origination.

Suppose for example you’re being quoted 30-year fixed refinance rates at 4.0%. In Texas the refinance closing costs for this mortgage average $4,619. You could accept slightly higher refinance rates at 4.25% and pay zero closing costs. On a $250,000 mortgage the difference in your monthly payment is $36.31.

Which is the better choice? It depends on what you’re already paying and how much longer it’s going to take you to break even recouping your out-of pocket mortgage refinancing expenses. If you’re unable to break even because of a higher payment amount or term length you’re going to be losing money, no matter what your interest rate.

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You can learn more about paying less refinance closing costs with today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

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Adjustable Rate Mortgages Are Making a Comeback

Are you searching for the lowest refinance rates for your next home loan? Adjustable Rate Mortgages are becoming a good option with little risk from today’s best mortgage lenders. Here are some of the pros and cons of refinancing with an Adjustable Rate Mortgage in today’s market.

Adjustable Rate Mortgage Demystified

If you’re unfamiliar with Adjustable Rate Mortgages here’s the basics you’ll need to know. Abbreviated as ARM, adjustable Rate mortgage loans have an interest rate that changes at regular intervals. When the lender changes your interest rate, also called resetting your ARM, your payment amount will change based on the new interest rate.

How often your ARM resets depends on the type of adjustable rate mortgage you choose. These mortgage loans are designated by two numbers. The first number represents the fixed period of the adjustable rate mortgage and the second number is how often the home loan resets. Take a 7/1 Adjustable Rate Mortgage for example, the interest rate is fixed for the first 7 years and resets every 12 months (1 year) after the fixed rate period.

Who Should Refinance With An Adjustable Rate Mortgage?

You’ll find that Interest rates on an Adjustable Rate Mortgages are typically lower than 15-year fixed mortgage rates. Considering that the average homeowner refinances every 4-5 years a 5/1 or 7/1 Adjustable Rate Mortgage could be an excellent choice if you need a short-term mortgage as a bridge before selling or refinancing down the road. Taking advantage of the lower interest rates offered by and adjustable rate mortgage will get you a lower, fixed payment for five to seven years.

What Are The Risks of Adjustable Rate Mortgage Loans?

The main risk when refinancing with an ARM is that interest rates will go up when the lender resets and take your payment along for the ride. Many Adjustable Rate Mortgages are tied to the LIBOR index which is a European index susceptible to all the economic turmoil going on in the European Union. If you have a low tolerance for financial risk your best bet for mortgage refinancing might be a 30-year fixed rate mortgage.

Another problem homeowners run into with Adjustable Rate Mortgages can be the lender’s prepayment penalty. If your Adjustable Rate Mortgage has a prepayment penalty in the loan contract and you sell or refinance before the penalty ends you could be facing a hefty fee at the end of your ARM’s fixed rate period.

Should You Choose an ARM for Your Next Home Loan?

The answer to this question depends on your needs and goals for your home loan. If you need the lowest possible mortgage payment choosing a 5/1 ARM will get you the lowest refinance rates. Sticking with a 30-year term length with your Adjustable Rate Mortgage will ensure you get the lowest monthly payment.

If your goal is to build equity in your home and you’re ok with the risk a 15-year Adjustable Rate Mortgage will give you the best of both worlds; lower payments than fixed-rate mortgages while building equity at an accelerated rate over a 30-year mortgage.

Other Factors to Consider than Just the Lowest Refinance Rates

One of the most common mistakes people make is focusing on getting the lowest refinance rates at the expense of fees. The more you pay when refinancing your home at closing the less benefit you’re getting from having low refinance rates. If you’re not able to break even recouping your out-of-pocket expenses paid at closing you’re going to be losing money no matter how low your interest rate.

Some of the most commonly overpaid fees include the broker’s loan origination fee or paying for discount points. These fees are not only negotiable by vary widely from one mortgage lender to the next.

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You can learn more about getting the best deal on your next home loan from today’s best mortgage companies by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to get you started refinancing without paying lender junk fees…

Mortgage Refinancing Without Losing Your Shirt

Did you know that according to the Secretary of Housing and Urban Development in the United States your friends and neighbors will overpay sixteen billion dollars for their home loans this year alone? Did you also know that nearly all your friends and neighbors are overpaying as much as $1200 or more every year? Want to save that $1200 on your next home loan? I know I could sure use an extra $1200 in my budget with the direction this economy is taking, how about you? I’m pretty sure I know the answer to that question so settle in with a cold drink because I’m about to share with you my best tips for refinancing with the best mortgage refinance companies without paying hidden markup or junk fees.

Mortgage Refinancing With Wholesale Rates

If this is your first visit to you might be wondering who the heck am I and how am I qualified to give you mortgage refinancing advice? First of all, my name is Robert Regehr. I’m not a mortgage broker, banker, or anyone working in anything remotely financial. How am I qualified to give you mortgage refinancing advice? My first home loan was a train wreck. I fell for every dirty, underhanded trick that a sleazy mortgage broker uses to boost their commission at your expense when mortgage refinancing. I didn’t have a clue how bad my first home loan was until a good friend of my parents, who is a retired mortgage broker, pointed out the hidden markup and junk fees in my home loan.

When I figured out this broker had soaked me to the tune of $1200 a year I was mad enough to start this blog with the help of that retired mortgage broker and I’ve been sharing this dirty little mortgage refinancing secret the broker fat cats would rather you didn’t know about with anyone that’ll listen. I am of course, referring to a hidden fee paid by lenders called mortgage refinancing Yield Spread Premium. Don’t worry if you’ve never heard of Yield Spread Premium, I had never heard of it and based on the facts from the HUD Secretary, I’d say 97% of your friends and neighbors have never heard of it either.

What is Yield Spread Premium?

Simply put, mortgage refinancing Yield Spread Premium is a kickback lenders pay to any broker that locks and closes your new home loan with a higher than necessary interest rate. Lenders do this because they make the majority of their profits selling your home loan to investors on the secondary mortgage market. It’s this hidden markup that drives your mortgage refinancing up by as much as $1,200 a year or more in some States like California.

The good news is that you don’t have to fall for this hidden mortgage refinancing markup. It is possible to refinance your home paying just a flat fee of just one percent for loan origination and walk way from closing with a wholesale mortgage rate, you just have to know how to go about it. Don’t worry, you don’t have to be a personal finance guru or have a cousin in the business to get the kind of mortgage refinancing deal I’m describing here, you just need to find the right person to arrange your next home loan.

Get Wholesale Mortgage Rates & Save…

You can learn more about finding the right person to arrange your next home loan with wholesale interest rates by checking out my free Underground Mortgage Refinancing Videos.


Here’s a quick sample to get you started on the road to a wholesale mortgage rate by exposing more of your broker’s very dirty secret…

Mortgage Refi Rates for Dummies

Want the lowest mortgage refi rates for your next home loan but don’t know how to go about it? Worried that hidden markup and junk fees could turn getting those low mortgage refi rates into a horrific mistake? Here are several of my best tips for avoiding hidden markup of your mortgage refi rates and junk fees that result in overpaying thousands of dollars.

Lowest Mortgage Refi Rates

Everyone wants the lowest mortgage refi rates for their home loans; however, most people don’t understand is the quasi-retail nature of mortgage refi rates. With the exception of bank originated home loans (there are hidden reasons for avoiding those completely), home loans originate with wholesale mortgage lenders. Everyone knows buying wholesale can save you a boatload of cash when it comes to things like electronics and home appliances, well the same is true when it comes to mortgage refi rates.

Wholesale Mortgage Rates

Home loans may originate with wholesale lenders but like most retail products they’re resold by a middleman with markup for a profit. Cut out the middleman and you’ve got yourself wholesale mortgage refi rates right? Not exactly. The problem with getting wholesale mortage refi rates is that even if you did contact a wholesale lender directly most have retail divisions that have the same retail markup you get everywhere else.

So how can you get wholesale mortgage refi rates? Most brokers will tell you that you can’t simply because they’re protecting the commission they get from marking up your home loan. The secret to getting wholesale mortgage refi rates is finding the right person to arrange your home loan. I’m not talking about having a cousin who is a mortgage broker doing you a favor (if you’ve got a good mortgage broker in the family you probably wouldn’t be reading this) but finding an honest, local broker to arrange your next home loan for a flat loan origination fee without making up your mortgage refi rates.

Hidden Home Loan Markup

What is this hidden markup of your mortgage refi rates that I’m talking about? In a nutshell, any broker that locks and closes your home loan with higher than necessary mortgage refi rates gets a commission known as Yield Spread Premium (YSP). Think of YSP as a kickback to the broker for overcharging you. This kickback is not only an incentive to overcharge you, but that higher than necessary mortgage refi rate drives up your payments meaning you’ll have less cash in your pocket. Don’t get me wrong, I’m not saying brokers don’t deserve to get paid for their work…that’s what the loan origination fee is for. Paying your broker a flat loan origination fee of one percent of your home loan amount is more than ample compensation for the work they do arranging your home loan. Brokers and other mortgage companies like Lending Tree have no business taking a hidden commission at your expense…but it happens all too often.

In fact, according to the Secretary of Housing and Urban Development your neighbors in the United States will overpay Sixteen Billion Dollars this year alone thanks to Yield Spread Premium. The good news is, now that you know what Yield Spread Premium is you can learn how to avoid it.

Check out my free Underground Mortgage Videos and you’ll learn how to recognize and avoid this hidden markup of your mortgage refi rates as well as other junks fees that serve no purpose but to separate you from your hard earned cash.


Here’s a quick sample of what you’ll get with your free Underground Mortgage Refinancing Membership. It’s free, easy to understand, and will only take a few minutes of your time.

Great Mortgage Refinancing for Dummies

lowest mortgage rate Great Mortgage Refinancing for Dummies

Refinancing your home loan allows you to take advantage of low mortgage rates as well as change the terms of your existing mortgage loan.

Before you decide to refinance your existing mortgage it is important to determine how long it will take you to recoup the expenses of refinancing your home loan. Here are several tips to help you decide if mortgage refinancing is right for you.

Mortgage Refinancing for Dummies

The process of refinancing is simply taking the balance you owe on your existing mortgage and paying it off with a new mortgage. You may have the opportunity to borrow against your home’s existing equity and get cash back in the process. Keep in mind that there are fees that you will be required to pay and there could be a penalty for paying off your existing loan early. You should examine your existing mortgage contract for a prepayment penalty prior to applying for a new mortgage loan.

Closing costs are the fees you will be required to pay when refinancing and you will encounter many of the same fees you paid when you first purchased your home. There are banks boasting about their “no fee, no closing cost” mortgage loans; however, you should know that you are trading a higher mortgage rate which will drive up your payment amount for these closing costs.

What About Mortgage Points?

Paying “discount” points on your new mortgage allows you a way to buy down your mortgage rate. One point is the equivalent of one percent of your mortgage amount paid at closing. Suppose for instance you are required to pay two points on a $150,000 mortgage, this means you will have to fork over $4,500 at closing to get the interest rate promised to you. Should you pay discount points when refinancing? In most cases no. Mortgage rates are at historically low levels and for most homeowners it doesn’t make sense paying for a mortgage rate that another lender would be willing to give you.

Types and Term Length of Mortgage Loans

Refinancing your home loan gives you the opportunity to change the term length and type of mortgage rate for your loan. Mortgage rates come in three basic varieties: fixed, adjustable, and hybrid. Hybrid mortgage loans are a combination of fixed and adjustable rate mortgages and are best suited for homeowners who only plan on keeping their homes for a short while and want to minimize their risk of payment shock from an Adjustable Rate Mortgage.

Refinancing your existing mortgage means choosing the right type of interest rate, term length, and loan originator for the new loan. Most homeowners overlook the importance of choosing the right person to arrange the new loan as this person sets their fee and commission based markup of your mortgage rate. Choosing the right mortgage broker will make or break your new home loan and could save you thousands of dollars every year you keep the loan.

Click Here For More Details…

You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.

  • Get My Underground Mortgage Videos
Here’s a quick sample to help you pay less at closing for current mortgage rates