The average closing costs are about 3% to 6% of your mortgage’s principal.
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In 2021 the average refinance closing costs in the US were $2,375 without taxes, according to data from financial tech company ClosingCorp.
According to the Federal Reserve, typical closing costs are about 3% to 6% of your mortgage’s principal.
Your refinancing costs will vary based on where you live, the value of your home, and your new and old lender’s requirements.
If rates have gone down since you first got your mortgage, refinancing your home can help save money on your monthly mortgage payment. It can lower your interest rate, or stretch your mortgage over several more years.
But the refinancing process can be expensive. Refinancing essentially replaces your old mortgage with a new one, and that typically means paying closing costs all over again.
How much does it cost to refinance?
When you refinance, you may pay a little less than what you paid on your original loan. According to data from ClosingCorp, average closing costs on a mortgage refinance were $2,375 in 2021, excluding any recordation or other specialty taxes. ClosingCorp didn’t disclose the national average refinance closing costs with taxes for 2021.
By contrast, the average home purchase closing costs without taxes were $3,860 in 2021. This means that borrowers who are refinancing pay a little less for their mortgages than those who are purchasing a new home.
Average closing costs by state
One of the big factors that will influence the price you’ll pay on your home’s refinance is where you live. Your home’s location will have a big impact on the closing costs, since your closing costs involve taxes and your home’s value.
According to data from ClosingCorp, the state you live in will change how much you pay at closing. Here were the average closing costs with taxes in each state in 2021.
Average closing costs with taxes
Average percentage of sales price
Closing costs are higher in some states than in others. In New York, for example, where both property values and taxes are high, average refinance closing costs are over $10,000. In Missouri, however, where both property taxes and values are relatively low, average closing costs are $1,405.
Typical refinance closing costs
Refinancing closing costs aren’t just one fee — there are several expenses that make up closing costs. Much of the money you pay at closing covers your lender’s fees and any services that were used in the process of underwriting and closing on your loan. Some of your costs may also go to taxes.
Here’s a …read more
Source:: Business Insider