REDUCING MY INTEREST RATE AND PAYING CLOSING COSTS April 29, 2009

If extra borrowing is not a priority and the purpose of the refinancing is merely to reduce the interest rate it may still be necessary to increase the principal balance to cover the closing costs of the refinance.  In refinancing a borrower will normally incur bank (application, appraisal), title and legal fees which can cost quite a bit.  Unless the borrower is prepared to bring a check to the closing these costs are normally rolled into the refinancing leading to a higher principal balance.  Since these costs are included in the mortgage they are paid back with interest over the term of the loan and can result in thousands of dollars of added interest costs over the term of the loan.  Get a GFE to so you can determine the fees and whether to pay them upfront or incorporate them into the principal balance of the new mortgage.

Steven Decker is a New York Personal Injury attorney specializing in New York real estate law , New York business law, and New York franchise law. You can visit his Law Firm Decker, Decker, Dito and Internicola website by clicking here, download his FREE New York Car Insurance book, or call him at 718-979-4300 or 1-800-310-5520 for a free case analysis.

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