Refinancing your mortgage is similar to closing on your home with one exception – there’s no down payment. Depefnding on your current financial circumstances, the cost of refinancing might not outweigh the overall savings. Refinancing your mortgage could save you thousands or even tens of thousands of dollars over the new mortgage term. In most cases, this is far more than the closing costs and other fees involved. That is why if you are eligible to refinance, it does help to save money in the long run.
The average cost to refinance a mortgage is right around $5,000. You should anticipate paying roughly 2% to 5% of the total mortgage loan amount for closing costs. These costs can be affected by:
- location of the property
- purchasing discount points
- title fees and other services required during closing
- type of loan
- whether or not it’s cash-out refinancing
If you’re wondering what refinancing a mortgage costs, here is a list of the possible fees involved and how much you should expect to pay for each:
|Credit report||$30 to $50|
|Recording||up to $250|
|Loan origination fee||0.5% to 1.5% of the total loan amount|
|Title insurance||up to $1,000|
|Prepaid Interest charges||depends on the day and closing rate|
|Flood certification||up to $25|
|Mortgage points||depends on number of points|
|Home appraisal||$200 to $600|
Lowering Your Refinancing Costs
If you’re thinking about refinancing, you’re most likely interested in saving money by lowering your interest rate and/or your monthly mortgage payments. The following strategies could help you lower your closing costs:
- Ask your mortgage lender how to save money on closing costs. They may have a low- or no-closing cost option available. Although this option may have a higher interest rate attached, you could still save money overall.
- Choose an end-of-month closing date. Signing your closing documents at or near the end of the month will save you money by reducing the amount of prepaid interest you’ll have to pay at closing.
- Get 3rd party quotes for services like a settlement agent, survey, and title search.
- Use the same title insurance company that you did when you purchased your home.
- While getting your home appraised is required for refinancing, a home inspection is not. Skipping the home inspection could save you between $300 and $450.
Refinancing in Columbus with Liberty Capital Services
Reducing how much you have to pay at closing could make it more affordable for you to enjoy the savings of a lower mortgage rate or reduced term. To learn more about this, call Liberty Capital Services today at (614) 505-0620. Our team is available for your assistance and will answer your questions about refinancing and interest rates. Call us now!