How to Refinance Your Home Loan to Save Money

A home, or domiciled, is a residential space used for an individual, family or group as a primary or secondary residence. It is usually a fully furnished or partially finished space with both exterior and interior aspects. While a home may be a single dwelling, it may also be a condominium building, apartment building, mobile home, land trust, or a town house. Most individuals rent a home to live out their life in. For some individuals, renting is the only option available as they may not qualify for a mortgage or the amount of equity that would allow for such a large purchase.


A home would most likely be purchased by the first buyer in line if the situation was right; i.e. there were a significant number of buyers interested in the property. A second buyer may become available if things progressed beyond the first buyer’s interest, but usually not beyond the limits of the first buyer.

The homeowner then makes the decision whether to pursue the offer or walk away. Often times, sellers have the best interest of the buyer at heart. They may offer slightly less than the buyer will ultimately pay, in order to close the deal on the short term or immediate term. However, many homeowners do not realize how the closing costs are calculated. They believe that they are being quoted a closing cost by the seller, when the fact is that the closing costs are determined by the lender and not the homeowner. These closing costs are typically the difference between the final bid and the actual closing costs of the buyer, and are often, far greater than what the buyer initially paid.

Homeowners who take out a mortgage from a bank or other lender do not always choose the house that they actually want or need to live in. In order to maintain the monthly payments, many buyers are forced to stay within the house buying price range they initially chose. This means that the bank has to factor the amount of closing costs into the final mortgage amount, and this is where many home buyers make their initial mistakes. In some cases, these final mortgage amounts are significantly higher than what the buyer originally paid.

The second mistake made by many buyers is paying the association dues, which are non-refundable. In addition to the actual costs of the home itself, there are also additional costs that are deducted from the homeowner’s monthly payment. Some lenders tack on property taxes, which are due when the association dues are due, as well as homeowner association fees. These fees can make the homeowner’s monthly payment balloon very quickly, and without extra money to cushion the blow, the homeowner may have to scramble to find a new lender in order to refinance their loan.

Although the lender will typically offer a lower closing costs quote, this is not always the case. Many buyers are under the impression that they will save money by taking out less money per month, but in reality, they are just replacing one expense with another. For example, with a five year term loan, the closing costs are more than twenty dollars per month, making them a significant financial loss for most homeowners. By comparison, most people can easily afford paying two or three times that amount for a fifteen year term loan.