Refinancing a mortgage has been a popular option discussed by lenders for quite some time now. Refinancing isn’t for everyone and many people may have actually suffered worse financial states because of their decision to refinance. However, homeowners who have rejected or resisted refinancing offers may be rewarded for their efforts with new offers that could actually serve them best.
In the past, large fees and closing cost requirements left many homeowners with very minimal relief with their monthly payment and huge out of pocket expenses. Although mortgage rates haven’t changed much since they hit historic lows just a few years ago, what has changed is how lenders are acting in accordance with these rates. Refinancing applications fell by 17 percent in 2011, leaving lenders with tough choices. Since the decrease in popularity among foreclosure alternative options, lenders have become more willing to play ball with homeowners looking to capitalize on these low rates.
Many lenders have begun offering flat fee closing cost options for mortgages up to $1 million. Since the average closing cost is about 2 percent of the total loan amount, a person with a higher mortgage is essentially paying far more for their closing cost than a homeowner with a lower mortgage. Banks have even offered closing cost flat fees for as little as $499, about a $15,000 savings for someone who is refinancing an $800,000 mortgage. Further, many lenders are relaxing their qualification standards and opening up flexible refinancing options for those with less than perfect credit.