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posted: 12/15/2012 5:30 AM

Many ways to structure fees when refinancing loan

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Q. In your column a reader said they were refinancing with no fees. Do you know what company is offering that deal? I owe about $31,000 and am at 7.125 percent with 13 years left on the mortgage. Refinance fees I have found are high. Would paying extra on the principal be a better option?

A. I don't know what arrangement that reader had made for the deal he wrote about. It could have helped if he had a perfect payment record on his present loan and a shining credit record overall. He may have used a simple FHA or VA "streamline" refinance.

Some plans allow you to add fees to the amount being refinanced, or to pay slightly higher interest in return for no fees. Either way would still be much better than just prepaying your current mortgage.

Start by consulting your present lender. To replace your remaining 13 years, ask about a 15-year mortgage or if they offer it, a 10-year, which would still cost less every month than you're paying now. Don't be tempted to replace your mortgage with a longer loan, no matter how much it might reduce your monthly payment.

You could also take your question to a mortgage broker or two. It shouldn't cost anything to inquire whether they can arrange what you're looking for.

But, if you don't end up refinancing, paying off early would still save money, especially given your high interest rate.

Q. My boyfriend and I both owned our own houses and decided to sell and buy one together. We found an agent we liked, told him we would list our houses with him and hired him to help us find our new house. Well, my boyfriend sold his house and we found a new house and bought it.

We are now ready to put my house on the market. The agent came up with a suggested price and I feel like I would like a second opinion. Would I be going behind his back if I consulted another agent? What obligation would I have to the second agent?

A. It's always wise to consult at least three agents before deciding on price. Tell your current broker, frankly, that you're doing that, and tell the other agents you are just looking for some free advice with no obligation. You can even say you already have the broker you'll probably end up using. It'll be up to those other agents whether they want to put in the time and effort to research the market value of your property and call on you. My guess is that most would welcome the opportunity to become familiar with your property and try selling their services. They're used to it.

Q. How is a triple net real estate transaction considered for residential real estate? Can you elaborate? I'd appreciate to know if there is any advantage to the buyer.

A. The term "triple net" usually applies to a type of commercial lease. With it, the tenant agrees to pay all three expenses -- property taxes, insurance costs and maintenance. Rent paid to the property owner is pretty much net income.

I suppose the same arrangement could be used with a residential lease in an unusual situation. As with all real estate agreements, there's no one right or wrong way to structure a deal. Everything depends on the needs of the parties.

Q. A purchase offer was made on my house. The buyer gave a $1,000 binder. A letter was sent to my lawyer, the buyers were bank approved. A sold sign was put on my house. Two days before closing date, the Realtor said there was a problem, the buyers could not get the funds and there was no closing.

The Realtor has not given me the binder; it is in escrow at the agency. Do I have any recourse and should the binder be given to me? I have the feeling my agent does not think so.

A. Your contract may have been "subject to" the buyers obtaining financing, and if they can show they made a good-faith effort to get a mortgage loan, they may be entitled to return of their deposit. They might, for example, have run into trouble with the last minute double-checking that's now required on their qualifications. On the other hand, the contract may set some deadlines that could make a difference. A lawyer could interpret the contract for you.

If you feel that the two-day notification wasn't fair and perhaps put you to extra expense, there's always small claims court where you can represent yourself and get a judge's opinion.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

2012, Creators Syndicate Inc.

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