How much does it cost to refinance your mortgage?

If you’ refinancing a mortgage to grab cash for both financial needs and wants. Sure, there may be some paperwork and costs involved, but the positives certainly seem to outweigh the negatives.

For instance, here are some pretty good reasons to refinance:

• Secure a lower interest rate
• Make a lower monthly payment
• Pay off your loan sooner
• Get rid of mortgage insurance
• Get cash from your home equity with a cash out refinance

All these advantages come with opportunities to save money, which you can then use to achieve other financial goals.

However, you may not know all the closing costs and other types of fees that could influence the overall cost of refinancing. Here's a breakdown to help you decide if refinancing is right for you.

Moreover, refinancing costs can vary widely. For example, an appraisal of a modest home in a small town might cost as little as $300, while an appraisal of a large or custom home in a major metropolitan area might cost double that amount.

This checklist shows most of the refinance closing costs you may be charged:

• Loan application fee: Some lenders charge a nonrefundable upfront fee when you apply for a new mortgage.
• Loan origination and documentation fees: Lenders typically charge these or other similar fees to process your loan application and, if your loan is approved, close and fund it.
• Home appraisal fees: You may have to pay for an appraisal to refinance so your lender can determine whether you have enough equity to qualify for the loan you want.
• Title search and insurance: A new title search and title insurance policy are usually required when you refinance. You may see fees for this vary depending on several factors.
• Flood certification fee: This fee enables your lender to determine whether your home is in a federally designated flood zone. If it is, you may be required to purchase flood insurance as a condition of your loan.
• Recording fee: This governmental fee is typically required to record your new refinance mortgage in public records.
• Discount points: Discount points are a type of prepaid interest that you can choose to pay upfront when you get a new loan to lower, or "buy down," your interest rate. One point equals 1 percent of your loan amount.

When determining the overall cost of a mortgage refinance, it’s important to get information about these fees from your lender or by doing research on average costs in your area. These may help you to budget effectively and understand how much you may be able to save by refinancing.

When there are no costs for refinancing a mortgage

In some instances, borrowers complete a no-closing-cost refinance because they don't want to pay closing costs out of pocket.

Instead, the lender pays the closing costs or adds them to the loan amount. A loan with lender-paid closing costs typically will have a slightly higher rate.