debt

Don't let bill errors empty your wallet

Suspicious refinancing fees
Suspicious refinancing fees © Sandra.Matic/Shutterstock.com

Lower interest rates are spurring homeowners who can do so to refinance their loans to lower payments, get cash back or shorten the terms of the loan. But don't spend more than you should. For example, the title insurance should not cost more than 0.5 percent of the total value of the property, says David Cay Johnston, author of "The Fine Print: How Big Companies Use 'Plain English' to Rob You Blind." If it amounts to more, shop around. You don't have to use the lender's title insurance company, Johnston says.

Likewise, when you receive your copy of the appraisal, go over every single line -- especially if the appraisal seems low, Johnston says. Make sure every relevant box is checked. For example, if you have a fireplace and central air conditioning, be sure those boxes aren't left blank. Then look up every recent sale in your neighborhood to make sure the appraiser didn't include the lowest sale for the least comparable house.

Finally, read the final documents carefully. Johnston knows of cases where borrowers were told the final costs would be one number, but the final documents showed costs that were double that quote. Make sure the loan amount is correct and all spaces are filled in correctly.

Takeaway: Question the bill on all mortgage refinance fees, and if necessary, demand new documents that are properly prepared.

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