1. What Are Closing Costs?

Closing costs are fees paid at the closing of a real estate refinance transaction. They typically include lender fees, title insurance, appraisal fees, and other third-party charges associated with processing your loan.

2. How Closing Costs Are Calculated

The basic calculation for closing costs is:

Where:

• Lender Fees - Origination fees, underwriting fees, and other charges from your mortgage lender
• Title Fees - Title search, title insurance, and related services
• Appraisal Fees - Cost to assess your home's current market value
• Other Fees - Recording fees, credit report fees, prepaid items, etc.

3. Understanding Refinance Closing Costs

Details: Refinance closing costs typically range from 2% to 5% of the loan amount. These costs can often be rolled into the new loan, but this increases your total borrowing amount.

4. Using the Calculator

Tips: Enter all fee amounts in dollars. Use estimates from your loan estimate or closing disclosure form. Contact your lender for exact figures.

5. Frequently Asked Questions (FAQ)

Q1: What's the average closing cost for a refinance?
A: Typically 2-5% of the loan amount. For a $200,000 loan, expect $4,000-$10,000 in closing costs.

Q2: Can I negotiate closing costs?
A: Yes, some fees (especially lender fees) may be negotiable. Shop around and compare loan estimates.

Q3: Are there no-closing-cost refinances?
A: Yes, but these usually have higher interest rates to compensate the lender for covering the costs.

Q4: What's included in "other fees"?
A: This can include recording fees, transfer taxes, credit report fees, prepaid interest, and escrow deposits.

Q5: How can I reduce closing costs?
A: Compare multiple lenders, ask about lender credits, and see if your current title company can provide a reissue rate.