Closing Costs Associated With Buying And Refinancing

Sumit Bhatnagar
 


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There are three important types of closing costs associated with buying and refinancing. They are as follows:

  • Interest

    When the transaction on your refinance is closed, it is most likely that there will be some outstanding interest due on the old loan. Say, for instance, if you decide to close the transaction on August 20th, when you made your last payment, there will be a twenty days interest due on the old loan and ten days prepaid interest on the new loan!

    Moreover, the first payment on the new loan would not be asked until October 1st. This is because you have already paid all the interest of the month of August when you closed the refinance transaction.

    It is worth noting here that as the interest is paid in arrears, a September payment would have paid August's interest, which has already been paid in closing.

  • Reconveyance Fee

    When the existing lender “reconvey" the collateral interest in your property back to you through recording of a ‘Reconveyance’, the fee charged for the same is called as the ‘Reconveyance Fee’. This fee varies from $75 to $125.

  • Demand Fee

    Yet another fee that can be charged by your existing lender is called the ‘Demand fee’. This fee is charged for calculating the payoff figures. Generally, this fee might run in the neighborhood of $60 only.

    Thus, these are some of the closing costs associated with buying or refinancing. Find out more about these closing costs in detail before taking the final decision. Internet can provide you with a lot of information on the same.

    Refinancing a Loan - find out more on mortgage and refinancing

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