Refinancing a mortgage has the potential to save you money, but the process is not free. You may wonder, do I have to pay closing costs when refinancing? There are typically closing costs involved with a refinance, and the amount you will be responsible for at closing can range from one lender to the next. Before you go through with refinancing, you will want to make sure that it is the best decision financially, and consider ways to lower your refinance closing costs. By shopping around and negotiating lender and title fees, you can significantly lower your closing costs and save money.
Average Closing Costs When Refinancing
When determining your estimated closing costs, there are many factors to consider. Some of the first things that your lender will look at when verifying your eligibility is your credit score, how much equity you currently have in your home, and the type of loan you are applying for. You can expect to pay many of the same types of fees that you paid when you originally closed on your home, however there may be others included.
The most common fees associated with refinancing include:
- Mortgage Application Fee: This fee is charged to the potential borrower for the processing of the loan application.
- Property Appraisal Fee: A property appraisal fee covers the expense of having a professional appraiser evaluate the home and provide an estimate based on its market value.
- Loan Origination Fee:This upfront fee is charged by the lender for putting the loan in place. It can be a percentage of the loan.
- Attorney and Closing Fees: Some attorneys charge a flat fee while others charge an hourly rate. These closing costs often range between $500 and $1,000.
- Title Search and Title Insurance: During a title search, the title examiner determines if there are any encumbrances on the property. The closing company can then offer title insurance to the property buyer. These expenses vary due to loan amount.
- Local Recording Fee: A local recording fee is charged by a government agency when recording a real estate purchase, allowing the sale to become public record. This fee also varies based on loan amount.
Learn More About Refinancing Closing Costs
It is a common question often asked by homeowners who are looking to refinance: “Do I have to pay closing costs when refinancing?” The answer is yes! For more information about mortgage refinancing closing services, contact Mathis Title Company today at 703.865.7880.