What is a reasonable settlement cost for refinance?
When you refinance your mortgage, there are a few fees that you’ll need to pay to get the new loan. These fees are collectively referred to as settlement costs and can add up to a couple of thousand dollars. The good news is that you can negotiate with your lender to have them cover some or all of the settlement costs. So here’s a look at some standard fees and how much you can expect to pay.
Application fee: This is a fee charged by the lender for processing your loan. It’s typically a flat amount and can range from $600-995.
Valuation fee: To get a loan, the lender will need to order an appraisal to assess the value of your home. This fee can range from $250 to $600.
Settlement costs can vary depending on the lender, the type of loan, and the loan amount. You can expect to pay anywhere from 2% to 5% of the loan in settlement costs. So, on a $200,000 loan, you could be looking at $4,000 to $10,000 in fees.
In conclusion, you may want to shop around and see what each lender charges in standard fees. Most lenders can give you a range of expected settlement costs based on your loan amount and some credit information.