Refinancing Fees At A Glance
Think of it this way—refinancing your home simply means you’re getting a whole new mortgage. And like the mortgage you have now, the new one comes with its share of standard fees and costs you can expect to incur….
Loan Origination Fee (sometimes referred to as “points”): It’s the fee your lender will charge you for making the loan. It could be listed as a separate line item or as a percentage (points) of the loan amount. One percent equals one point.
Application Fee: You’ll pay a processing fee to have your application considered. If your loan is rejected, the application fee will most likely be forfeited.
Appraisal Fee: Your lender will want to establish current market value for your home to support the loan. No matter how recent your last appraisal was, expect to pay for another one.
Credit Report Fee: Your lender will also want a look at your current credit status. You may be paying your current mortgage like clockwork and may have qualified easily for it. It doesn’t mean your lender will automatically okay you for the refinance.
Recording Fees and Taxes: These are the costs associated with registering your property with the county. Even though the property hasn’t changed hands, the deed needs to be updated and the new mortgage and lender recorded. Be sure and see what the county charges for this. Lenders and/or title companies can inflate these costs to create another revenue source.
Title Search/Title Insurance: Like the other fees, though you had a clean title on the property previously, the new lender will want their own confirmation this time. They want to verify your ownership and that you have not incurred any liens on the property.
Attorney’s Fees: If the lender hires an attorney to review all documents before closing, you will need to reimburse them for it. Or, you could opt to hire your own attorney to do the same thing.
Closing Fees: This is the cost to have an attorney or title company conduct the closing. Your lender may recommend someone but you are free to shop around and compare prices. You just might save some money if you do.
These are the most likely fees you will face when you choose to refinance your home. There may be others: Discount Points, Re-conveyance Fees, Wire Transfer Fees, etc. But those can often be avoided or negotiated away by shopping around.
Refinance scenarios are as individual as the people who apply for them. But if you rely on reputable and experienced resources, a refinance loan can be well worth the effort it takes to secure it.