You may be eager to lock in a super low mortgage rate through refinancing your existing mortgage. You should be aware that there is a slew of refinancing fees that are common to refinancing despite how good your relationship is with your lender. Many of these fees will look familiar, as you were required to pay them to be approved for your home loan.
Upon submitting your refinance application, banks usually assess an application fee to review your documents and check your credit. Expect to pay at least $100 dollars.
The fancily titled origination fee is actually just the bank’s cut of your refinancing or new loan. If your loan is 100,000 and the origination is .05%, you will pay the bank a $500 processing fee.
Title and Insurance
The bank will have to verify that you own your home. They will check public records to verify this, and for whatever reason, this often costs more than $300.
In order to verify everything is as it should be, banks usually hire lawyers to review your application paperwork. While plenty of banks have in house lawyers so they don’t have to pass on the cost to customers, you may sometimes be required to cover the cost of having a lawyer review your refinancing or new loan.
These fees may sound hefty, but you could potentially save thousands refinancing your loan. Do the preliminary work of making sure a refinancing is completely worth it—even saving $1000 dollars, all told, is worth it in the long run if you are a serious saver. That said, sometimes the associated costs of refinancing make it unattractive.