The Cost of Closing on a Refinanced Mortgage

aerial view of the suburbs, the cost of refinancing your home

Looking into refinancing your mortgage every few years is necessary for you to get the best available interest rate on your home loan. Failing to do so means leaving money on the table, money you could be using to send your kids to college.

While a lower interest rate may look great on paper, it isn’t very helpful if the closing fees cost you more money in the long term. Fortunately, Missouri has some of the lowest average closing costs in the country, averaging $1,927 for a $200,000 mortgage.

You can’t be certain what your closing fees will be until you get a quote, but you can use an estimator tool to help you get an idea of what you’ll be paying or you can use the average cost above as a guide.

Use a refinancing calculator to see if a refinancing your mortgage works for you.


Origination Fees

Your credit score was high enough to get you your original mortgage loan, so many of the types of fees you’ll pay for a refinanced mortgage will be familiar to you. The fee amounts are determined by the state you live in, your credit score, the type of loan you have, and the percentage of equity you have in your home.

Loan Application Fee – This fee is applied to start your application. It may be waived once your application is completed, but it won’t be refunded if your application is rejected.

Home Appraisal Fee – The title insurance company uses this fee to professionally appraise the value of your home because the value may have changed since your first mortgage was taken out.

Loan Underwriting Fee – The title insurance company charges this fee to have a mortgage writer determine your eligibility to repay the loan. Generally, this is one percent of the loan amount.

Title Insurance – Your policy on your original mortgage will no longer be valid after you refinance and new title insurance must be purchased.

Prepayment Penalty – Some lenders may charge you a fee for paying off your loan early. For this reason, it is vital to read the fine print before making any big financial decisions.

Credit Report Fee – To determine your credit score, the title insurance company pays for your credit report.

Mortgage Points – In return for paying less in interest, you’ll pay more up front. This is typically one percent of the loan amount for every $100,000 loan.


Reducing Fees

It is important to ask for a loan estimate and to shop around before refinancing your house. Fees add up and they can determine how much you truly end up paying throughout your loan. You can save money by asking the lender to waive the appraisal fee, which can save a lot of money on your mortgage loan, often hundreds of dollars. You can save money on title insurance by using the issuer for the original mortgage, which will typically give you a highly discounted rate.



Overall, it’s important to read the fine print carefully so that you are aware of exactly what you’ll be paying. Refinancing can be a great way to save money, but hastily choosing a lower interest rate could make you end up paying more money overall. By being aware of the fees associated with refinancing your mortgage, you can have the confidence to potentially save thousands of dollars.