Should my refinance cost this much?
July 13, 2010 12:47 PM   Subscribe

Where do I find a mortgage refinance that doesn't cost an arm and a leg?

So with rates incredibly low, it seems an opportune time to refinance.
However, the estimates I've gotten include closing costs on the order of $5k, which seems very high to me.

Am I expecting too much in wanting closing costs to be a bit lower?
Given that all the estimates I've received from local brokers come in about the same, is there somewhere else I can go? Online? Do credit unions typically offer lower fees?

Some more information that might be useful:
I'm in Oregon.
I've gotten quotes from multiple brokers.
Credit is good.
Refinancing approximately 75% of the value (depending on how the assessment shakes out)
posted by madajb to Work & Money (15 answers total) 1 user marked this as a favorite
Can you trade a slightly higher interest rate for lower closing costs?

That used to be the game, but I suspect that nowadays lending institutions want some serious money up front since there are so many anecdotal accounts of people cashing out their house and walking away.
posted by Doohickie at 12:51 PM on July 13, 2010

We need to know how much you're trying to refinance. $5k could be entirely reasonable.
posted by valkyryn at 1:03 PM on July 13, 2010

Brokers generally have access to the same information and, assuming general comptence, are going to come up with the same deals. Perhaps you haven't made your goal of low cost to you clear enough and they are looking for the lowest rate. Say explicitly that you don't want to pay more than $1,000 (or whatever) and you want the best deal given that restrction and see what they say.
posted by It's Never Lurgi at 1:05 PM on July 13, 2010

I just used Lending Tree or one of the mortgage comparison engines online (actually, it was linked from an old AskMeFi question). If it'll save you time, the two that were the best were at and If you MeFi mail me, I'll give you the names of the agents I worked with. They were both really solid, and had closing costs a good bit lower than $5K.
posted by Alt F4 at 1:07 PM on July 13, 2010

If you're a USAA member, they offer very low closing costs.
posted by thewittyname at 1:18 PM on July 13, 2010

Response by poster: We need to know how much you're trying to refinance. $5k could be entirely reasonable.

Between $150,000 to $200,000.
posted by madajb at 1:23 PM on July 13, 2010

I refinanced through Fremont Bank somewhat over a year ago. Zero closing costs, and the rates were competitive.
posted by zombiedance at 2:15 PM on July 13, 2010

I have also refinanced happily with quickenloans.
posted by spinturtle at 5:35 PM on July 13, 2010

I have a friend who's refinanced with Quicken Loans a couple of times, and swears by them.
posted by fixer at 5:35 PM on July 13, 2010

So closing costs between 2.5-3%? That's not terrible. 5% would be bad.

Still, the suggestions here are good ones. There are banks out there that will provide zero closing costs loans, but beware:

1) Your interest rate may be higher, which will increase your monthly payments.

2) If you do your loan online, you lose the ability to trundle on down to the bank on a Tuesday to settle an issue then and there. If you don't need service, this won't matter, but should you find that you need to change your payment date, etc., this could be a huge pain in the ass. Just something to keep in mind.
posted by valkyryn at 10:51 AM on July 14, 2010

Response by poster: valkyryn -
The monthly payment isn't that big a deal. I plan to continue paying the same amount I do now. This is more for the long-term interest savings more than anything else.

Good point about the service, but I kind of assume my mortgage will be sold off to a faceless bureaucracy anyway, or is that not a thing anymore since the housing crash?
posted by madajb at 3:48 PM on July 14, 2010

It happens, and there really isn't any way of preventing that, but it isn't happening as much as it used to.

If you're really worried about that, go to a credit union. They tend to be strongly committed to their local communities, intensely conservative about their underwriting guidelines, and emphasize service and price more than traditional commercial banks. Some of their websites kinda suck, but this is a mortgage, not a checking account, so I don't see that being all that big of a deal.
posted by valkyryn at 6:22 PM on July 15, 2010

Response by poster: If you're really worried about that, go to a credit union.

Not really concerned, just saying that online or mortgage broker, it still all going to be faceless bureaucracy, so going down to the bank isn't going to be an option in any case.
posted by madajb at 9:03 PM on July 16, 2010

Response by poster: Now I'm running into a YSP credit which is apparently a pass-along of what used to go to the broker in order for the broker to sell you a higher interest rate.

So, now I'm apparently paying myself to have a higher interest rate?
posted by madajb at 9:05 PM on July 16, 2010

Response by poster: Thanks for the help, folks, we are now officially refinanced.
posted by madajb at 3:04 PM on August 29, 2010 [1 favorite]

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