Refinancing your home loan can often make a lot of sense. But there are fees involved you should know about. Below we’ll look at these home loan refinance costs.
In this article, we’ll cover what you can expect to pay if you decide to refinance your mortgage. Because it will give you a good idea of what to expect before you actually go through with it.
Also, there are ways that you can lower the cost of home loan refinance. We will also discuss things you can do to reduce your refinance costs.
Home Loan Refinance Costs
To give you an average number of what home loan refinancing costs, the closing costs will be around $5,000.
That said, what you actually pay may differ quite a bit from that. First, that’s just an average. And, second, there are a number of factors that go into the costs. So the actual costs will vary widely on a case-by-case basis.
Factors That Affect Refinance Costs
Let’s dig in a little deeper to see what factors go into the costs you’ll pay.
Usually, you can pay anywhere between 2% up to 6% of the loan principal amount in closing costs. There will be certain factors that will affect the costs of your home loan refinancing which includes the following:
- Your loan size
- Your lender
- Where you live
- Credit score
- Your available home equity
- Type of mortgage
- Term of mortgage
Sample Fee You’ll Have To Pay To Refinance
The fees included in home loan refinance costs are the following:
- Application Fee: $75 – $500
- Origination Fee: 0.5%-1.5% of loan principal
- Recording Fee: $25 – $250 (exact cost depends on location)
- Appraisal fee: $300 – $400 or more
- Home inspection: $300 – $500
- Title services: $400 – $900
- Credit check fee: $25 – $50 0r more
- Flood certification fee: $15 – $25
- Survey fee: $150 – $400
- Reconveyance fee: $50 – $65
- Attorney/closing fee: $500 – $1,000
How To Lower The Closing Cost Of Mortgage Refinance
There are a couple of ways to lower the cost of mortgage refinance. Here are some of the best ways to do that.
Boosting Your Credit Score
It is no secret that having an excellent credit rating can help take you places. In this case, it can help lower your interest rates.
Compare Mortgage Rates And Offers
Always look for multiple mortgage offers and decide which one is the best for you and your family.
Ask For Fee Waivers
Ask your banker or lender if they can waive or lower the application fee or credit check fee.
Decide If You Will Buy Mortgage Points
Buying mortgage points may make sense if you are planning to own the home for a long time. Purchasing mortgage points lower the closing costs of your mortgage.
Try Choosing A No-closing Cost Refinance
Although it is not free, a no-closing cost home loan refinance means you do not have to pay for your fees at closing.