What Is The Average Closing Cost For A Refinance?
If you're considering refinancing your home loan, one of the most important questions you'll need to answer is what the average closing cost for a refinance is. After all, you'll need to know how much money you'll need to set aside to cover the cost of closing. Fortunately, the answer to that question varies depending on the type of refinance you're considering.
Traditional Refinance
A traditional refinance typically involves the same closing costs as a purchase mortgage. This includes origination fees, points, appraisal fees, title insurance, credit report fees, recording fees, and other miscellaneous costs. Typically, these costs range from 3 to 6 percent of the total loan amount. These costs can vary significantly from lender to lender, so it's important to shop around and compare offers from multiple lenders.
Streamline Refinance
A streamline refinance offers a way to refinance your current mortgage without a lot of the normal costs associated with a traditional refinance. With a streamline refinance, you won't have to pay for an appraisal or any of the other costs associated with a traditional refinance. Instead, you'll only have to pay the closing costs associated with the refinance, which typically range from around 1 to 2 percent of the loan amount.
Cash-Out Refinance
A cash-out refinance is a type of refinance where you borrow more than you owe on your current mortgage, and use the additional funds to pay off other debts or take cash out of the equity in your home. The closing costs associated with a cash-out refinance are typically higher than with a traditional refinance, ranging from around 3 to 6 percent of the loan amount. Additionally, you may be responsible for paying certain fees, such as title insurance, recording fees, and other fees.
Conclusion
The average closing cost for a refinance varies depending on the type of refinance you're considering. With a traditional refinance, you can expect to pay closing costs of around 3 to 6 percent of the loan amount. With a streamline refinance, you may be able to get away with paying just 1 to 2 percent. With a cash-out refinance, you may have to pay 3 to 6 percent, plus additional fees.