Low Closing Costs: The Complications of Closing a Debt

2007-03-08 10:33:40

( Business )



CLOSING TIME

Closing costs refer to the different fees that you have to pay after you have finished with paying your mortgage. These closing costs involve among others, legal documentation fees as required by law and the fees charged to you by your lending company.

The issue with closing costs is that banks and lenders providing you with mortgage can only make an estimate of your total closing costs. You can only know the entire closing cost amount when you are about to close the mortgage, and the discrepancy between the estimate and the actual value can be significant, making it very difficult for you to actually close the debt.

CHEAPER CLOSURE COSTS

Given this fact, most financial institutions are introducing modified mortgage plans with guaranteed low closing costs or with no closing costs at all. Low closing costs does not mean that you will not be required to pay the legal and documentation fees. Low closing costs only mean that the fees the lenders charge upon closing have already been worked into your regular monthly mortgage payments.

Closing costs can be very expensive, especially the title fees. That is why opting for a low closing costs mortgage plan is perhaps a better alternative. Under a low closing costs plan, you reduce the amount of your closing costs as you pay your mortgage dues. It is like paying for the closing costs on a staggered basis. You chip away at your closing costs piece by piece until what is left is a very manageable amount.

You can also refinance closing costs if they turn out to be a lot more expensive than you can afford. It is like extending your mortgage payments a little bit longer. There are companies who provide such services or you can ask your current lender if they render refinance closing costs services.


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