How to break out of a mortgage commitment, part 2

...continued from part 1

2. Discharge fee

It is really a fee on top of the penalty fee. So you are already paying the penalty and now the lender want to add another fee to make even more money. This fee is often around $275-$400. When first signed the agreement to accept the loan, you also signed an agreement to pay a discharge fee at the documented amount specified by the lender.

Work Around:

One way to avoid this fee is by using the same lender. Make sure you ask your lender first. Sometimes, your new lender is also willing to cover this fee.

 
3. Appraisal Fee

Penalty fee and discharge fee gets you out of the mortgage and so now you need to find a new lender. To do that, you will need an appraisal once again. This fee is ranges from $200-$400

Work around:

This fee can be covered by the new lender. If you use the same lender, you should not need an appraisal.

4. Legal Fees

If you are getting a new lender, your new lender may expect you to get lawyer for the changes. If you are refinancing, meaning you want to borrow more money, then it is possible, even your current lender is going to expect a lawyer to make these changes.

Work around:

Because it is a mortgage change as oppose to a new property, some lenders are willing to ignore this legal fee. Other lenders are willing to cover this fee.

Go To Part 3...

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