Costs Associated with Mortgage Refinancing

A Home Buying Article Contributed by Elizabeth Fox-Wise

Whether Applying for a First Mortgage or Refinancing There Will Be Fees to Pay

When you talk to a lender about mortgage refinancing, they will prepare a "Good Faith Estimate" of what you can expect to pay for fees and services. Because the mortgage lender is typically the one who will prepare the estimate for you, many home buyers think that all of the fees originate with the lender, this is not true. The lender is only preparing you an estimated guess, based on his experience, of what it will cost you to refinance your mortgage.

Expect the actual costs to vary some from the estimate and be prepared for it to cost more. The lender has no way of knowing for sure what the actual costs will be for anything other than his own fees.

When comparing and contrasting two potential lenders for your mortgage refinancing, don't look at the total cost. Only compare the costs that are actually charged by each lender, those are the only ones that will be accurate. All lenders are only making informed guesses about costs charged by others in the mortgage refinancing process.

Lender Fees for Mortgage Refinancing

The following fees are typically charged by a lender for mortgage refinancing. Therefore, these fees can accurately be compared from one lender to the next. The lender is not required to include all of these fees in their estimate; however, you might want to question them about any that are not included to find out if no fee is associated with them or they just were not included in the estimate.

Loan Origination Fee for mortgage refinance is typically paid in "points" at the time of the mortgage origination. One point equals one percent of mortgage total amount.

You will usually have to pay an Appraisal Fee as part of your mortgage refinancing. Since your home is the collateral for the mortgage, it's value will have to be professionally appraised.

You should also expect a fee for obtaining a copy of your Credit Report, a Mortgage Broker Fee if a broker was used in the refinancing process, and a Flood Certification Fee to prove the home is not in a flood zone. Your lender may also charge a Tax Service Fee so someone can monitor that you are paying the taxes on the property.

Other Possible Lender Fees for Mortgage Refinancing

In addition to the standard fees, the lender refinancing your mortgage might charge other fees as well.

Many mortgage lenders charge administration fees to the person seeking mortgage refinancing. In addition to, or instead of, the administration fee, you might pay Underwriting Fees and Document Preparation Fees.

Occasionally you might run into a mortgage refinancing lender who also charges Appraisal Review Fees. Some mortgage lenders will routinely review property appraisals as a quality control method, and charge a fee for the review.

If the mortgage money is being funded by wire transfer you might also be expected to pay a Wire Transfer Fee.