With average interest rates below 7 percent, now is a great time to refinance your Michigan home loan. Refinancing can help you get a better interest rate, lower your monthly payments, and change the term of your mortgage. If you have built up equity, refinancing can also help you extract cash from your home. As beneficial as refinancing can be, you should know that there are certain costs associated with refinancing your Michigan home loan.
When you closed on your original mortgage, you probably paid closing costs. When you refinance, you will be required to pay almost all of these costs all over again. Fortunately for Michigan residents, Michigan closing costs are relatively low. The average borrower pays only $2,593 to close on a $180,000 loan. This amount is several hundred dollars less than the national average.
Most borrowers automatically assume that they must pay whatever their lender tells them to pay at closing. The truth is that you can negotiate to get lower fees. In some cases, lenders may waive your fees altogether. Refinancing fees that are negotiable in Michigan include application fees, document preparation fees, and loan processing fees. The costs of appraisals and credit checks may also be negotiated or waived.
Rolling Costs into Your Loan
If you want to refinance, but don't have extra cash lying around, you can always ask to have your closing costs rolled into your loan. This will ultimately cost you more money in the long run, but it will allow you to refinance to a lower rate or change the terms of your loan immediately so that you don't have to wait until you have the money saved.
Visit Michigan Lending Center to see our Top 3 Refinance Lenders Servicing Michigan , whether you are looking for home purchase, refinance or a home equity loan.