What are the costs of refinancing my mortgage is a common question for many homeowners. Knowing what it costs to refinance is an important factor in deciding whether refinancing is a good idea or not.
If you think back to when you got your original mortgage you had closing costs on that mortgage. You can use the amount of closing costs for that mortgage as a guide. Chances are, however, that your closing costs for a refinance will be lower; good news for sure.
What Are My Refinancing Mortgage Costs?
To get an idea of refinancing mortgage costs think back to your original mortgage and your closing costs. Forget about any down payment that you may have made and forget about any real estate transfer tax you may have had to pay. With these two fees out of the picture you can gain an idea of the costs of refinancing your current mortgage.
But this alone is not sufficient to answer your question as there are some details missing that you will need to get a better idea about what your refinance will cost you.
Across the board it is impossible to give real exact figures about the costs of refinancing until all the information about the mortgage and your credit, income, and home value have been discussed with a mortgage loan officer. Some costs depend on the size of your mortgage while some fees have nothing to do with your mortgage amount, but are associated with where you live. The following is a list of fees that you will typically have to pay on a refinance.
Example of the Costs of Refinancing
- Loan Discount Fee - considered "Points" - typically seen on FHA loans
- Loan Origination Fee - could be considered "Points"
- Processing Fee - anywhere from 0 - $995 depending on company
- Underwriting Fee - anywhere from $495 - $995 depending on company
- Mortgage Origination Fee - can be a set fee or a percentage of loan amount - may be $0 or more.
- Appraisal Fee - depending on home size and geographic location and property type this could range from $300 to $1,000 or more
- Tax Service - typically $50-$100
- Credit Report $10-$50
- Recording Fee $35-$100 depending on County Courthouse and number pages of mortgage recorded
- Reconveyance Fee - $50 and up depending on where you live
- Escrow Account Set Up - up to 6 months of annual real estate taxes and home owners insurance can be collected
- Title Insurance - varies per state and mortgage amount
- Title Insurance Escrow Fee - varies per state and mortgage amount
- Title Insurance Attorney and Notary Fees - varies per state and mortgage amount
- Title Endorsements - typically $50 each and most policies will have at least 2-3 endorsements
- Courrier Fees - could be $0-$100
- Document Overnight Delivery - could be $0-$100
- Flood Cert - $0-$25 or more depending on company
- Appraisal Field Review Fee - $200 and up depending on geographic location and appraisal company
- Interim Interest for new mortgage - depends on when you close your loan in the month. Later in the month this will be less than earlier in the month.
- Facsimile Fee - $10 and up depending on title company/attorney closing your loan
There may be more to these fees, but this covers most of what you should expect to see on a good faith estimate from your loan officer as you decide whether or not to refinance or not.
Mortgage Escrow Account Refund When You Refinance
One thing to keep in mind when you refinance your mortgage is that you should get some money back from your current mortgage company from the escrow account they have set up for you. Typically within 45 days from mortgage being paid off you will receive any type of escrow refund from your old escrow account and perhaps any refund due from paying your old mortgage company too much on the payoff when you refinanced.
Hopefully this article has given you a better sense of the types of closing costs you will face when you look at deciding whether to refinance your mortgage or not.
Do you have a pre-payment penalty? If so, read this article about should you refinance with a prepayment mortgage penalty.
