How Much Are Closing Costs For A Refinance.
When people realize that they are paying a high interest on their mortgage, they can opt for refinance to bring down the monthly payments that they make on the mortgage. This can help to save thousands of dollars which would have otherwise gone in paying the interest. Usually, a refinance should only be done after checking the interest rate and the closing costs. Only if the interest rate is low and you do not pay too much for closing costs should you opt to refinance the mortgage.
How much are the closing costs for a refinance? Usually, when you refinance a mortgage, the closing costs vary from two percent to three percent of the loan amount. The cost will include the following things:
- Application fee for refinancing the loan: This amount is around $400 on an average.
- Closing fees of the lender: This varies from one lender to another and usually ranges from $725 to $750.
- Settlement fees: Be ready
to shell out around $350 for this
- Title examination fee: Based on the state where you are taking the loan and buying the house, this fee is between $150 and $450.
- Title insurance: Again this amount varies from one state to the next and from one lender to the next. However, most home buyers pay between $225 and $400 for it.
- Fees for preparing the documents: The fee ranges from $200 to $400.
- Escrow payments: This includes things like escrow insurance and payments and has to be paid in advance.
- Points: These are paid to bring down the interest and the points have to be paid in advance. The good news is that these points are deductible and can be very useful for those people who intend to live in the house for a long time to come.
There are certain fees from the closing costs that can be reduced via negotiation, and this can help bring down the overall closing costs when you refinance the mortgage.