How I Figure Out My Mortgage Refinance Costs?

Summary

Doing a refinance can be one of the largest and most important financial transactions of your life.

Here is some help in figuring out what all those refinance costs will be.

Basics

Your refinance will typically have many different types of fees.

If you go for a "no closing cost" option you are not really avoiding these costs - you are having them rolled into your loan in the form of a higher interest rate.

Your loan charges may include:

Loan Origination Fee     

This fee is a charge for originating or creating the loan.    
                
Loan Discount     

This is an upfront charge paid to the lender to get a lower interest rate – same as “buying the rate down”.    
                
Appraisal Fee      

This is the cost of the independent appraisal. It is usually paid by the buyer.    
                
Credit Report      

This is the cost of the credit report.   
                
Lender's Inspection Fee      

This is the lender’s cost of inspecting a property – some may double check the appraisal provided by an independent appraiser.    
             
Mortgage Broker Fee     

This is the upfront charge that a mortgage broker charges. Brokers can also earn a “rebate” from the lender which is not listed here.    
                
Tax Related Service Fee      

Lender fee, usually small, for handling tax related matters.    
                
Processing Fee      

This is the charge for processing the loan – collecting your application, running credit, collecting pay stubs, bank statements, ordering appraisal, title, etc.    
                
Underwriting Fee      

This is the cost of the loan underwriter (approver)    

Wire Transfer Fee      

This is the cost of wiring the money around, which is usually done by escrow.      
             
Interest for days X $ per day      

This is your prepaid interest for your mortgage loan.    
                
Mortgage Insurance Premium      

This is the prepaid mortgage insurance premium, if you have one. This is the insurance premium some lenders charge for loans with little equity.  
             
Hazard Insurance Premium     

This is your home’s hazard insurance being prepaid.    

VA Funding Fee      

This is the Veterans Administration funding fee, which is something you will not incur unless you go through a VA program.    
             
Hazard Insurance Premiums   

This is any prepayment of your future hazard insurance expense.          

Mortgage Ins. Premium Reserves months

This is any prepayment of your future mortgage insurance expense.    
                 
School Tax months

This is any prepayment of your future school tax expense.    
                
Taxes and Assessment Reserves months

This is any prepayment of your future tax expenses, such as property taxes.    
                
Flood Insurance Reserves months

This is any prepayment of your future flood insurance expense.    
                          
Closing or Escrow Fee     

This is the cost of escrow. This is the service of a neutral party that actually handles the money between all the different parties in a real estate transaction, including: the lender, the buyer, the seller, the agents, notary, etc.
             
Document Preparation Fee      

This is the charge for preparing the loan documents. Lenders often email the loan documents to the escrow company, which in turn prints them out and reviews them before signing.    
                 
Notary Fees      

This is the cost of the notary. This is to have all of the legal documents surrounding this transaction notarized.    
                
Attorney Fees      

Any legal charges.    
                
Title Insurance     

This is the cost of insuring the title of the property. If there is a question about title (who really owned the property), after the transaction is done then this insurance protects the lender from future problems.    
                
Recording Fees      

This is the cost of updating relevant government records.    
                
City/County Tax/Stamps      

Unavoidable government charge.    
                
State Tax/Stamps      

Unavoidable government charge.    
                          
Pest Inspection      

This is the cost of the pest inspector. Their purpose is to document the state of the property that the lender is making the loan on.  
                
Others charges           

These can be additional charges that change within different loan sources.

Pay particular attention to these charges, but they can also be listed in other sections.    

There are many free mortgage calculators available online to help you.