With mortgage rates still very low, borrowers all across Connecticut are refinancing their mortgages. Even with the unfortunate drop in real estate values and the changes in the types of mortgages that are available, many people can and are refinancing. With rates this low, now is the time to refinance your CT mortgage if you can! But along with the rate and the other parts of your mortgage approval, a borrower should also consider loan closing costs.
Who does refinance mortgage loan closings in Connecticut? Do I have to use an Attorney?
Historically in Connecticut, mortgage loans have been closed by a Connecticut real estate attorney. Connecticut is considered an ‘attorney state’ meaning that real estate closings are performed by Connecticut licensed attorneys. However, for better or worse, closings are also increasingly done by title companies. These closings are usually not done by or under the supervision of an attorney, and are usually performed by a company that the lender chooses, and may even have a financial relationship with. The actual loan closing is commonly performed by a notary, who is prohibited from actually explaining the loan documents. While frequently the borrower is told this is a cost saving measure, the services of an attorney frequently cost no more, and sometimes are even less expensive than paying for a notary and title company to do the closing. There is really no reason not to insist on having an experienced real estate attorney for your loan closing.
What are the common refinance loan closing costs?
The typical charges include the cost of a title search to verify ownership of the property and what mortgages or liens are on it; a settlement fee or an attorney fee (the charge for actually performing the closing); the title insurance that the new lender requires; FedEx or overnight mail charges; copy costs; rundown or bring to date service; recording service; wire fees; title examination; and title binder. These are in the 1100 series line in the HUD-1 Closing Statement. These fees are in addition to whatever the lender charges, such as prepaid interest, escrows, points, etc. As you can see, the list seems endless!
How do I compare my loan closing costs on a refinance loan?
It can sometimes be difficult to compare different closing costs since not all closing agents, be they attorneys or title companies, charge in the same manner. Sometimes a low settlement fee will be quoted, but there will be numerous additional charges. Sometimes the settlement or attorney fee will seem high, but there will not be many other fees. Bottom line, you have to ask all the fees being charged before you can make an apples to apples comparison. And do not assume an attorney is going to charge more than a title company. As a borrower, I would not agree to close without a firm estimate and understanding of the total loan closing costs.
How much are the closing fees?
The closing costs charged by various providers vary greatly. Title insurance in Connecticut is one thing that you should be able to get a direct quote on, since each company sets its rates in a rate filing with the State of Connecticut Insurance Department and then is required to follow the rate it has filed. The only discount is for a refinance, and that discount is a 40% reduction in the premium for a refinance of an institutional mortgage within the past ten years, up to the amount of the existing mortgage. So be sure you are getting the refinance or reissue rate! As very general estimates, I will provide the following information: a title search can be from $75 to $200, depending on what type of search is required; loan settlement or attorney fee from $450 to $800; title examination $50; rundown and record or bring to date or recording service $50 to $75; FedEx/copies from $8 to 45. These are just estimates.
Can I find out what my closing will be?
I willingly provide fee quotes for closing services, and I think all providers should do the same. All I need is some basic information about the closing and I will provide an estimate of the fees required for me to perform the closing. You may contact me by email at firstname.lastname@example.org or use the contact form on this site, and I will provide a prompt and accurate response to your inquiry. You will receive the services of an experienced, dedicated real estate attorney, and you will have the peace of mind knowing that the loan was properly closed. I can provide loan closing services throughout Connecticut. I am approved by all major lenders in Connecticut, including People’s United Bank, Webster Bank, NewAlliance Bank, Milford Bank, and Family CHoice Home Mortgage.
Here is a link to a page on my web site that provides more information about mortgage refinances in Connecticut and the role of the real estate attorney.
Hopefully this information will help a borrower with their loan closing.