When you are purchasing a new home or refinancing an existing home, there can often be many costs associated with the process. Loan costs are dependent on several factors.
Purchasing a new home
When purchasing a new home, you will typically have higher costs. The reason for the higher costs is you have more lawyer fees, title fees and other associated fees. Not to mention you have to perform a home inspection and appraisal to ensure your future home is safe and the value of the home is accurate.
Refinancing an existing home
When you refinance an existing home, your mortgage costs aren’t as high as a new home purchase. You can refinance your home to get a better rate, pull cash-out to do home improvements or pull cash out to pay down debt. Refinancing doesn’t usually require as many legal fees and title fees. Plus if your income, mortgage and credit documentation is in order, the process goes much quicker and can lower costs. The benefit with refinancing is that you can roll these closing costs into your new mortgage so you don’t have to come out of pocket. » Read more: Mortgage Closing Costs 101