When you're finally ready to finalize the purchase of a new home and have a mortgage ready to be signed, you may be responsible for paying up to several thousands of dollars in fees associated with the mortgage closing upfront.

Any professional work or documents that need to be prepared to finalize the purchase of your new home may increase your closing costs substantially. In some cases the seller may agree to cover some, if not all of the closing expenses. Otherwise, you'll be responsible for paying these fees at closing, which range from 3 - 6 percent of the total mortgage loan price, out-of-pocket. Fortunately, you may be able to deduct closing costs from your yearly taxes if you pay the closing costs in a lump sum payment.

Some of the more common closing costs you may have to pay include:

Processing Fees

Application fees and fees for accessing your credit report when you first apply for a mortgage. These fees are usually nonrefundable if you aren't approved for the loan or don't make use of the loan. Loan processing fees may cost anywhere from $350 - $550.

Appraisal Fees

The fees charged by a professional appraiser who inspects the home before purchase to verify its market value. These fees can't be deducted from your yearly taxes. Appraisal fees may cost anywhere from $300 - $400.

Origination Fees

A flat fee or percentage of the mortgage loan value charged by the lender for all the costs associated with prepping the mortgage. This fee is typically 1 percent of the loan amount. For example, you would pay $1,000 in origination fees on a $100,000 mortgage. Some online lenders have eliminated this fee.

Discount Points

Points are the monetary equivalent of a percentage of the mortgage. For example, 3 points is the same as 3 percent of the mortgage price. If you have extra money you can pay the mortgage lender discount points, which will lower the interest rate you'll pay throughout the life of the loan.

Document Preparation Fees

The costs of all loan papers generated and processed throughout the loan process.

Attorney Fees

Any costs related to attorney representation of both the buyer and seller. You may be responsible for your own attorney's fees as well as the seller's attorney fees.

Title Insurance Fees

A one-time fee you pay to insure no monetary losses caused by title defects, liens against the property or other title problems regarding the property that may not have been resolved before you purchased your home. The insurer will search public records, fix any potential title problems that can be fixed before the title is issued or exclude the items in question from your policy. You may pay more than $400 for every $100,000 in home value for title insurance.

Home and Pest Inspection Fees

Fees that may be required by the lender to pay for inspections to verify your home is structurally sound and free of any insect infestations.

Insurance Fees

The premiums you must pay to open homeowner's and hazard insurance policies on your home. These premiums must be paid by closing.

Private Mortgage Insurance (PMI) Fees

Fees you'll probably be responsible for if you're making less than a 20 percent down payment. Private mortgage insurance protects lenders against loss if you default on your mortgage loan.

Survey Fees

Fees the mortgage lender may charge to have a surveying company verify the boundaries of the property you'll be purchasing.

Prepaid Interest Fees

All the interest that accrues on your mortgage before the first payment must be paid in advance when you close on your loan.

Assessment Fees

Additional fees you'll pay if you buy a condo or property governed by an association.

It's important to get full disclosure of all related closing costs before you're ready to finalize your mortgage. Otherwise you may end up with a very costly surprise when it comes time to sign the dotted line.

John Campbell is the writer and editor of CashBuzz, A financial portal with the latest articles on money management and links to online shopping credit cards for people with bad credit. As well as other loan products for the under-served credit market. This article may be reprinted on your Web site if the copyright, author information and active link are included.

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At times, we all feel that the world is starting to close in on us. Bills keep piling up, or suddenly you're faced with the prospect of a pay cut at work (or worse, you just lose your job). At these moments, it's important to weigh every possible option for simply staying afloat financially. One of the simplest ways to immediately have access to some ready cash is refinancing the mortgage on your home. Over the years, a homeowner pays a tiny little chunk of the mortgage each month. There are different length mortgages running anywhere from fifteen to fifty years, but every little payment represents a larger portion of your home that you own. Concurrently, with each payment, the bank owns less. Eventually, after you make your last payment, all of the equity in the home is yours. Obviously, many people don't reach this point until much later in their "financial" lives.

There are two kinds of refinancing to consider. The first is called "rate and term" refinancing. Here's the most basic definition of this option: You started your mortgage with thirty years of payments to worry about. Let's say that was fifteen years ago; that means you're halfway through. If you suddenly find that, for whatever reason, you can't keep up with your mortgage payment, this might be the option for you. For a small fee, you can extend the length of your mortgage. This way, you're using the equity in your house. Imagine a rubber band: when you refinance, you're stretching the length, but at the same time, there's less to account for each month.

With the current state of the economy, there's another reason to consider this option. Interest rates have never been lower than they are today, so when you refinance, you may be able to take advantage and secure a lower rate than you locked in with your original mortgage. That means you could actually save money over the long run, while lowering your monthly payment.

The other kind of refinancing is called "cash out". Essentially, you borrow against the equity you've invested in your home by "cashing out" money from your first mortgage. While you'll extend the length of time you have left making payments, the amount per payment will remain the same (or even become slightly lower). There is any number of reasons to consider pursuing this option. In the case of an emergency, you may need to quickly access a large sum of money. Perhaps you've lost your job, and want to be assured that you have a stash to look to in case things get worse. Either way, "cash out" refinancing is an option for generating a large sum of money quickly.

Whichever road you take, with the economy and interest rates in their current position, refinancing deserves at least some attention. Even if your current financial situation is relatively solid, you could end up saving money by refinancing at a low interest rate. Speak to a professional today to determine whether you can benefit from this course of action.

With the current financial climate you may be thinking about refinancing. Refinancing your home isn't something you should consider without doing proper research. There are certainly scam artists in the industry.

Get informed at Refinancing Right. We have a home refinance calculator to double check if refinancing really is in your best interested. Then if you decide it is you can find out some trust worthy mortgage brokers.

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There isn't one simple, all encompassing reason to refinance a mortgage. Each homeowner faces a distinct set of circumstances, necessitating a unique course of action. Along with taking out a second mortgage, refinancing is one of the most commonly used tools to access the wealth and equity in a home. Here are some common motivations behind the decision to refinance:

Taking Advantage of Low Interest Rates: As the U.S. economy continues to slip into a recession, Interest rates are lower than they have been in decades. If you purchased your home more than 5 years ago, you may have locked yourself into a rate considerably higher than those currently offered. By refinancing your mortgage, you can benefit from the new, lower rate. While there's no way to know if interest rates will continue to drop, it might be a wise financial move to secure one today. In addition, if you have an adjustable-rate mortgage (commonly referred to as an "ARM"), you can guarantee a lower rate for the duration of the mortgage by refinancing to a fixed-rate loan.

Difficulty Making the Payment Each Month: Many homeowners take out a mortgage for too much money, and then face difficulty each month making the payment. Refinancing your mortgage can lower your payments significantly, especially if you've been building the equity in your home for a decade or more.

An Improvement in Credit Rating: If you took out a mortgage at a time of personal financial difficulty, you may not have secured the best rate possible. As we earn more money and establish a more solid credit rating, access to money becomes "cheaper". If you've made your monthly credit card, automobile, and home payments on time, it's likely that your credit will have improved. With a higher credit score, you're in a much improved position to procure a lower interest rate.

Cancelling Private Mortgage Insurance: Lending agencies typically require additional insurance when purchasing a home with less than a 20% down payment. If your home's value has increased since the time of purchase, however, you may be able to cancel this insurance. Get your home re-appraised today to see if you qualify.

Major, Unforeseen Expenses: Life throws us some pretty hard curve balls sometimes. If one hits you, consider refinancing as a quick, easy option to access the equity in your home. Many people also refinance their mortgage to free up money for their children's college education.

Paying Down Other Debt: Do some simple math: If you're paying an interest rate of 14.99% on 30,000 dollars of credit card debt, you may benefit from refinancing, if only to free up money to pay off higher interest rates. Essentially, this means that you're consolidating your debt. You could potentially save a bundle of money in the long term.

Each homeowner must make his or her own decision as to the timing of refinancing their mortgage. If you fall into one of the categories above, however, take some time to talk to a loan officer today to see if it's the right call for you.

With the current financial climate you may be thinking about refinancing. Home refinancing isn't something you should consider without doing proper research. There are certainly scam artists in the industry.

Get informed at Refinancing Right. We have a refinancing calculator to double check if refinancing really is in your best interested. Then if you decide it is you can find out some trusted mortgage brokers.

Article Source: http://EzineArticles.com/?expert=J_Suffie