Obtaining a mortgage to purchase a home can be an expensive proposition. It is important to understand the costs ahead of time, because if you are refinancing to save money on a lower rate, the closing costs may wipe out your savings.

When a bank establishes a mortgage, there are expenses to do so. A lot of these charges are not under the control of your lender, since they are charged by third parties, but there are some fees that they do control, and will adjust if they really want your business.

or inspections -Title search -Credit report

Or more, depending upon the province.

As a prospective re-financer, you may want to know which of these fees can be reduced, or even eliminated, such as their application fee, and which are not under the bank’s control. As we mentioned, there are times when lenders are aggressively seeking new clients, and they may have special programs where certain fees are waived. The application fee is the most commonly waived, since this is a charge the bank itself makes. Other fees, that are just pass-through fees, such as attorney fees or appraisal fees are not likely to be waived.

First of all, make sure the bank gives you a good faith estimate of these fees (they are required by law to do so.) This will give you the opportunity to look at each of the charges and see if any of them can be reduced.

If you do find that any of the costs are not in line with standard rates (you can call another bank and ask them what their fees are-this will apply in some areas, such as an appraisal or a credit search, or you can file another application and get another good faith estimate), call them on it and request to negotiate the item.

Now that you know how much you have to pay, you have to make sure it is worthwhile to re-negotiate your current loan. You can obtain a mortgage calculator on many sites on the net, and it will tell you how much the loan is going to cost over its life.

Don’t forget that the new loan will now also cost all of the closing costs you will have, so add them to the calculation. You will now know whether or not a re-financing is a good idea or not. This is not a lot of trouble to take since it may save you a substantial amount.

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