It’s important to understand the costs and fees you’ll have to pay for refinancing and how long it will take you to recover those costs. Because you’re applying for a new loan, you may have many of the same types of closing costs associated with a home purchase.
Closing costs on a refinance will vary depending on such things as the number of points you pay if any, the closing agent that you use, and the amount to be deposited into an escrow account. Options for paying closing costs will also vary.
Rather than paying costs out of pocket, you can often finance some or all of your closing costs by adding them to the loan amount. It usually depends on how much equity you’ve built up in the property.
While doing this reduces the cash needed at closing, it could reduce the benefits of refinancing because you’ll pay interest on your closing costs for the life of the loan.
Another refinancing option with no VACU fees or third-party provider fees is also available to qualified borrowers. Some funds may still be needed at closing, such as for escrow and reserves for homeowner’s insurance and property taxes.
A mortgage loan officer will be happy to provide an estimate and help you evaluate your options. Please call Member Services at 804-323-6800 or 800-285-6609 if you have questions or if we can help you in any way.