Refinancing Costs

While refinancing offers many advantages, there are costs associated with it. To determine if refinancing is worth the costs involved, ask several lenders about the interest rates they offer, as well as any costs associated with refinancing. You may want to start your search for a new mortgage with the lender you used the first time. Sometimes, this lender will give you a better deal to keep you as a customer. You can also get refinancing information from a real estate sales professional you've worked with in the past. Refinancing is similar to applying for an original mortgage, so you can expect to pay similar costs. Some of these costs may include:

• The application fee, which covers the lender's cost to process your application.
• A fee for a search of the public record of ownership of your property.
• A title insurance policy, which protects the lender for any loss due to a discrepancy in the title. (You may be able to have your settlement company reissue your current title policy at a reissue rate, saving you some of the cost to have this service performed.)
• A fee to have your property re-appraised.
• A new survey of your property to confirm that no changes to the land or physical structures have been made that would affect its potential sale.
• A loan origination fee, which covers the lender's work in evaluating and processing your loan. It is usually expressed as a percentage of your loan.
• Other fees, depending on the type of mortgage refinancing you are seeking, may include a VA loan guarantee, FHA mortgage insurance, or private mortgage insurance.