Mortgage Fees 101
Homeowners who ignore their homework end up paying more for refinancing or taking out a second mortgage than it is necessary. If you do not understand what to precisely look for as far as terms and fees are concerned, how will you know what a good deal is like? So before you start applying for loans, here are mortgage basics that you have to consider: * Mortgage Interest Rates The mortgage interest rate you select when refinancing your loan is a very important factor. Mortgage rates can differ as much as 3 to 4% or even more from one lender to another. If you have a poor credit score, you can anticipate a higher interest rate than a homeowner with a good credit score. But, with a little groundwork you might be able to match that interest rate. * The Term is the Length of Time of Your Mortgage The term of the mortgage is the length of time you need to repay the loan. Terms vary from one year to as much as forty years. By choosing a term with a shorter length like fifteen years, your monthly fees will be higher. However you will build equity in your home faster. Term lengths of thirty or forty years offer lower monthly fees; though you will pay more to the interest and less to the equity in the early period of the mortgage. Always remember that long term loans have higher interest rates, short term loans have lower interest rates. * Anticipate Closing Costs When you refinance your mortgage, expect to pay closing fees. These fees will diverge from one lender to the next one. So consider the closing cost as a part of your comparison shopping. The costs include administrative fees, surveys, title search, appraisals, points and inspections. These are the fundamentals of mortgage fees. Learn these basics by heart so you will know what to do regarding your plans when moving into a new house.