September 3, 2010, Newsletter Issue #234: Fees and Closing Costs for a Second Mortgage

Tip of the Week

The fees and costs to close a second mortgage can be much less than those associated with a first mortgage. Depending on your mortgage lender, you may or may not need a full appraisal. Many second mortgage lenders now will accept a “drive by” appraisal (no interior examination) or even just a recent real estate tax bill showing your property’s assessed value. In addition, you should not need a full title examination, only a rundown from the date your first mortgage was recorded. If you shop around, you might even find a second mortgage lender having a “no closing cost special” as they do at times.

The projected costs that you might find:

Points : If you select a mortgage broker, you will probably still have to pay at least one point. Many banks and credit unions, however, make second mortgage loans with no points. Appraisal Fee : You may or may not need an appraisal. If a drive-by appraisal is acceptable, it should cost around $75-100. You might be able to merely submit a recent tax bill (if it shows your assessed value.) Title Rundown : A brief examination of your title since the date of your first mortgage to determine if any other recordings were made to your property since. If there are any, they will have to be paid off, by cash or included in this second mortgage proceeds, before you can close this loan. The cost should be around $50-75. Recording Fees : The new second mortgage must be recorded on your account and any other recorded items subsequent to your first mortgage must be discharged. The cost should be around $30-50. These should be the most frequent fees, although certain lenders might have some others. Make sure you get an honest estimate of your prospective closing costs before you apply for your new loan.

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