Refinance
Costs
When
you refinance your mortgage, you usually pay off your original
mortgage and sign a new loan. With a new loan, you again
pay most of the same costs you paid to get your original
mortgage. These can include settlement costs, discount points,
and other fees. You also may be charged a penalty for paying
off your original loan early, although some states prohibit
this. The total expense for refinancing a mortgage depends
on the interest rate, number of points, and other costs
required to obtain a loan. To obtain the lowest rate offered,
most mortgage companies will charge several points, and
the total cost can run between three and six percent of
the total amount you borrow. So, for example, on a $100,000
mortgage, the company might charge you between $3,000 and
$6,000. However, some companies may offer zero points at
a higher interest rate, which may significantly reduce your
initial costs, although your payments may be somewhat higher.
