How Much Does it Cost to Refinance Your Home?

Refinancing a home loan is in essence a way of trading for a better loan for the consumer, whether by changing the terms of the agreement and/or locking in a lower interest rate, the Home Buying Institute states.

The Facts

Every home loan is different, but on average the cost of refinancing can be from 3 percent, upward to 6 percent of the home's current principal balance. The variation in fee amounts are due to the state the home resides in, as well as the particular lender.

Considerations

Typical refinancing fees include: mortgage application, origination, attorney, title search and insurance, prepayment penalty and appraisal.

Helpful Tips

Refinancing is not a good option if the mortgage is nearing the end of its term, there is a large prepayment penalty, or if a move is impending in the near future, the Federal Reserve Board says.

References

• The Federal Reserve Board: A Consumer's Guide to Mortgage Refinancings
• HomeBuyingInstitute: Home Refinance Costs-How to Run the Numbers