You may think that refinancing your home is just a matter of signing a few documents with the bank. However, it is actually a bit more complicated than that. When you refinance your home, you will go through a closing process similar to when you first bought the property. The only difference between that closing and your refinance is that there is no seller or real estate broker involved in a refinance because you already own the home.
There are closing costs associated with a refinance just as there were when you first purchased your home. Closing costs could include fees for credit reports, appraisals, application fee, loan origination fee, and other fees and assessments. The average closing costs for a refinance in 2017 were about 1.5 percent of the refinanced loan amount.
Your closing costs may not need to be paid up front. For some traditional loans, closing costs can be incorporated into the loan so you don’t have any money to pay up front. There are some loan types, such as FHA loans, that do not allow for this. In those instances, you will need to have a cashier’s check for the amount of the closing costs with you when you arrive for closing on your refinance.
What to Bring
Closing on a refinance usually happens in the lender’s office or business location, although it can sometimes be arranged to occur in your home. You will need to bring a government issued identification card, your closing disclosure to compare with the final documents, and a list of contacts such as your attorney in case questions arise during the closing process.
If you are working on a refinance for your home, or think it may be the right option for you, we can help. Contact us today for more information and an appointment.