(3-Day Right of Rescission)

ALL re-finances on a Primary Residence (in Texas) require what's called a 3-Day right of rescission.   That means that the borrower/s have 3 full "business days" (excluding Sundays and Holidays) within which they can rescind or back out of the transaction.   These 3 days must pass before the loan closing is final and any funds disbursed.    This includes paying off your old mortgage company

(Title Policy)

All re-finances will require a new title policy regardless of how recent the last title policy was issued.   You may receive a substantial discount but it will depend on the age of your existing policy.    The rates and discounts for policy premiums are regulated by the state of Texas therefore will be the same amount regardless which title company handles your closing.  

(Tax Escrow)

The amount of money required for the initial set-up of the Tax Escrow Account is typically one of the biggest cause of a large amount rolled into the new loan or a large check to be written by the borrower at closing.    Depending on which month the new loan closes,   the new mortgage company may require up to 12 months of taxes paid at closing in addition to 14 months of insurance and/or homeowner's dues and private mortgage insurance. ( This can be avoided if you qualify to pay your own taxes & insurance)

Paying your own taxes, etc. is called an ESCROW WAIVER.   In many cases a one-time escrow waiver fee (typically .25% of the loan amount) is charged to the borrower opting to pay their own escrows.

(Surveys)

In many cases the old survey you obtained from your last loan closing is not acceptable and a new survey is required by the new mortgage company.     Some mortgage companies will not accept a survey older than 2 years old.    No-one will accept an old survey if any changes to the property have been made such as (new fences,  patios or decks installed or enlarged,  storage buildings,  pools,  etc.)   The more land involved....the more the survey will cost.

(Roll-In's)

The amount that may be rolled into the new loan on a re-finance is limited only by the lender's maximum L.T.V. (Loan To Value).   Usually 90% or 95% of the appraised value.   In other words,  90,000 or 95,000 on a property that appraised for 100,000.    As long as plenty of room exists between the appraised value and how much you wish to borrow,    you can literally show up to the closing table with only your ink pen and leave your checkbook at home.    *Understand however....to zero in with pin-point accuracy the exact loan amount necessary to match the required funds exactly,   is all but impossible.   Plan to be writing some type of check at closing.

(Loan Pay-off)

Your exact loan balance and pay-off is critical information in order to set your new loan amount.  Otherwise,  the amount you write a check for at closing may not be what you were planning on.    Variation in the final net pay-off is the biggest reason initial good faith estimates cannot be completely accurate.

( Private Mortgage Insurance  /  a.k.a.  P.M.I.  /  a.k.a.  M.I. )

Most all mortgage lending institutions and their loan officers will tell you that PRIVATE MORTGAGE INSURANCE is required on anything less than 20% equity or a 20% down payment.   HOG WASH !!!!!!

Private mortgage insurance can be avoided with as little as 5% equity or a 5% down payment!!!!     Why is there such a gross disagreement about such an obvious issue?     Well....Private Mortgage Insurance does provide a great deal of protection to the lender,    You have to pay for it,    you can't write it off of your taxes  and  anything different means a lot more work for the Loan Officer.    Get the picture?

( Closing Costs )

If your loan amount is large enough,  did you know all closing costs can be paid for you by merely raising the interest rate on the new loan as little as .125% or .25%?     Its a fact!!!!!

( Tax Deductions )

Whenever you  refinance your Primary Residence and pay POINTS associated with the new loan,   you can deduct those points on your tax returns.    *Note...you cannot write them all off in one year.   You must take the write-off proportionately to the finance term of the loan. (over 30 years,  over 15 years, etc.)   "Closing Costs" are not tax deductible.....however.......some creative ideas about the subject do exist!!!!

( Escrow Refunds )

Upon "rare" occasion,    a borrower's current lender will credit the present balance in their existing escrow account toward the loan balance or pay-off.    This allows the borrower to roll the costs of setting up the new escrow account into the new loan to avoid paying them out of pocket without making the new loan higher than the current principle balance.    You'll need to call customer service at your existing mortgage company and ask if they can accommodate you.

( Pre-Payment )

Did you know if you made only one extra full payment per year on a 30 year loan you would pay-off your loan almost 10 years early?    Its a fact!!!!!

( Streamline Re-Finances )

Some mortgage companies provide what are called "Streamline Re-Finances."   Streamline means nothing more than NO-APPRAISAL is required.    Some mortgage companies provide what are called a NO-COST STREAMLINE re-finances.    These have no costs associated with them as well as no appraisal.    These are usually F.H.A. or V.A. loans.     Conventional lenders also provide streamline loans.    Consult a mortgage expert to determine if you qualify for a streamline refi.