When refinancing property that you already own, why do you have to pay closing costs?
If you already own the property why pay closing costs the same as for a new property?
Answers | 3
Now, there are several ways to pay closing costs. The most popular is a no-cost refinance, however there is never really a "no-cost" refinance. All that means is that there should be no cost to you at the closing table, but the costs will be added to your loan balance or paid by receiving a higher interest rate. Neither are bad ways to do it, it just depends on your specific situation and what option is best for your wants and needs. It is best to speak with a loan officer or two. After you pick someone, make sure you have great communication about what you want. Ask a lot of questions from him/her.
Best wishes, Sean
Closing costs can be covered by bringing funds to closing, adding the costs to the loan balance, or using a lender credit to pay the costs. Many of my clients combine lenders' credit with bringing funds to closing in order to keep their new loan size the same as their old. Note that lenders credits apply when borrowers choose a slightly higher rate (making the loan more valuable to bond investors) rather than the lowest possible rate.
There is no "one size fits all" answer on the best way of handling closing costs. Every borrowers' situation is unique to them, which is why dealing with an experienced, capable loan originator is a key part of any mortgage.
Hope that helps, glad to assist if you have further questions. I write loans nationally. Ted