When your refinancing is finalized, you won’t pay all the closing costs of your original mortgage, but be prepared to pay origination charges, up-front costs and discount points if applicable.
At the time of your application, the lender will provide a Loan Estimate that details the fees you may pay. Closing costs for a refinance may include:
- Origination Fees - These are the lender’s charges for processing your mortgage.
- Settlement Services - This covers expenses paid to other parties on your behalf, including fees for appraisals, title search, credit reports, and document recording.
- Interest Prepayment - If you close a loan before the end of the month, the lender may require you to prepay interest on the loan for the number of days until the end of the month, depending on the option chosen.
- Tax & Insurance Escrow Deposits - Depending on your situation, you may have to make initial deposits into an escrow account to pay for real estate taxes and homeowner’s insurance.
- Discount Points - Sometimes, you can negotiate a lower interest rate by paying discount points at closing. Typically, each point represents 1% of the loan amount.
Lower your closing costs.
Most settlement services must be purchased by the lender, but you can shop around for others to get the lowest possible price. And in some cases, lenders may cover some or all of the closing costs. But if they don’t, be prepared with about 3 percent of your loan amount. Ask a PNC Mortgage loan officer about our no closing cost option.