How to Estimate Your Refinance Closing Costs

Refinance closing costs play a vital role in the refinancing process. Many homeowners have the need to refinance at some point in their lives. While the interest rate that you are being offered is important, it is not the only factor in making a decision. You also need to know how much the closing costs will be so that you can determine whether or not it is worth it. If the closing costs are too high, it negates the advantage that you have in refinancing. Therefore, you need to see the closing costs before you can make any decisions. Here are a few ways that you can estimate the closing costs for your refinance project.

Online Lenders

One of the best resources of information are online lenders. There are a number of online lenders that will show you everything before you even give them any personal information. These lenders believe in full disclosure and they will give you everything you need to know upfront. You can fill in your geographic region, the size of the loan that you need and they will be able to give you a good estimate of the closing costs. 

Good Faith Estimate

When you work with a lender, they are required by law to give you a good faith estimate of closing costs within three days. All you have to do is start working with a lender and fill out a loan application. You are still not obligated to do the loan, but you can get the good faith estimate for free. This will break everything down into individual categories to let you know what you would be paying.

If you do this with a few different lenders, you will be able to tell which lenders are high and which ones are reasonable. You need to shop for closing costs just like you would shop for an interest rate. Closing costs are negotiable, to a certain extent. Therefore, when you get a good faith estimate, you may be able to get a better deal on the closing costs by negotiating them.

Call a Mortgage Broker

Mortgage brokers are very well-versed in the loan market. They typically work with a number of different lending sources and they have a good idea of what to expect out in the market. You can always call one of them and chat. If you are in the market, they will be happy to talk with you and give you information about anything you want to know. They may try to set up an appointment with you to come in and talk, but you should be able to get some information from them over the phone. Just ask them what typical closing costs are on a refinance. They may not be able to give you an exact number, but they should be able to give you a general sense of what to expect. 

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