The average mortgage refinance cost ranges from 2% to 6% of the loan amount. This means a mortgage of $300,000 refinance could cost you between $6,000 and $18,000.
14 million American families refinanced their home loans, and around 64% did this to get lower interest rates. On average, these families paid $220 less each month on their mortgage.
As of June 2024, the median APR on a 30-year fixed refinance is 7.12%, and 6.68% on a 15-year fixed refinance. Now is the best time to refinance your mortgage.
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How Much Does It Cost to Refinance a Mortgage?
The cost to refinance a mortgage ranges from 2% to 6% of the loan amount. However, the exact cost depends on several factors such as:
- Loan size
- Your mortgage lender
- Your location
- Credit score
- Your available home equity
- Your chosen loan term
- Mortgage type
How Can I Save on Refinancing Costs?
Here are the ways to save on refinancing costs:
- Compare Multiple Offers: Search different mortgage lenders for the best rates and fees. In addition, you can apply for a loan with 4 to 5 lenders. And compare their offers to find who offers the cheapest interest rate.
- Improve Your Credit Score: A credit score of at least 780 will get you the lowest interest rate. To boost your score pay your bills on time, and reduce your debt.
- Negotiate Fees: You can negotiate with mortgage lenders to lower or remove the loan application and origination fees.
- Consider a No-Closing-Cost Refinance: Consider a no-closing-cost mortgage refinance if you can’t pay the upfront costs. The lender may charge a higher interest rate or add the closing costs to your loan balance.
- Choose a Shorter Loan Term: Shorter loans have lower interest rates and save money over time. Consider a 15-year mortgage instead of a 30-year one.
» 15 vs. 30-Year Mortgage: Find who saves a lot in interest payments.
What Are the Common Mortgage Refinance Fees?
Here are the common mortgage refinance fees:
| Common Types of Fees | Meaning | Average Cost |
| Application/ Credit Report Fee | A fee to process your loan application and check your credit score. | $75 to $500 |
| Loan Origination Fee | A fee is paid to the lender for handling your loan. | (0.5% to 1% of total loan amount) |
| Appraisal Fee | This fee is for a professional to assess your home’s value. | $300 to $700 |
| Tax Service Fee | A fee to ensure property taxes are paid on time. | It varies by county |
| Recording Fee | This fee is for making your new mortgage a public record. | The fees vary by county |
| Survey Fee | A fee for a surveyor to verify your property’s boundaries. | $150 to $400 |
| Title Services | Fees for a title search and title insurance to ensure the property is free of liens. | $300 – $2,000 |
| Attorney Fees | These fees are for legal services related to the mortgage refinancing process. | $500 to $1000 |
| Home Inspection Fees | Fees are paid for professionals to evaluate the property’s condition and value. | $175 to $350 |
When Is It Worth It to Refinance?
- Interest Rates: As of 2024, mortgage interest rates have fluctuated. Refinancing may be worthwhile if current rates are at least 1% lower than your mortgage rate.
- Equity in Your Home: If your home value has increased and you have at least 20% equity, refinancing can help. It can cut the need for private mortgage insurance.
- Credit Score Improvement: If your credit score has improved, you might qualify for a lower interest rate. For example, a shift from a 620 to a 780 credit score can affect the interest rates.
- Utilizing Home Equity: A cash-out refinance can provide funds for high-interest debt or significant expenses. You borrow more than you owe on your current mortgage and retain the extra cash.
The Bottom Line
Mortgage refinancing can lower your monthly mortgage payments and interest rates. Common refinancing fees include loan application, appraisal, and attorney fees. To save on these fees, compare different lenders and improve your credit score.
However, you should consult a financial advisor or mortgage expert. They can help you find out which loan term is best for you. And shows you how much you can save by refinancing your mortgage.
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Frequently Asked Questions
How much does it cost to refinance a 30-year mortgage?
Refinancing a 30-year mortgage costs around 2%-6% of the loan amount. This includes fees such as, appraisal, title insurance, and closing costs.
What is the current refinance rate for 30 year fixed?
As of June 2024, the average interest rate for a 30-year fixed-rate mortgage refinance is around 7.12%.
When should I refinance my house?
Refinance your house when interest rates drop or your credit score improves. Consider it if you need a shorter loan term or want to change the loan type.
