Why did my refinance quote look great until fees showed up?

Why do refinance quotes look great until I see the fees?

You received a refinance quote with an attractive rate, but the closing costs and fees made the deal look much less appealing. Lenders typically advertise their lowest possible rates to draw interest, but the full picture includes origination fees, appraisal costs, title insurance, and other closing expenses that can add thousands to your loan.

Refinance fees commonly include an origination fee (often 0.5% to 1% of the loan amount), appraisal fee ($400-$800), title insurance, credit report charges, and underwriting fees. Some lenders also charge processing fees or application fees. The total closing costs for a refinance typically range from 2% to 5% of your loan amount.

Compare the Loan Estimate from each lender to see exactly what fees they charge. Look at Section A for origination charges and Section B for services you cannot shop for. Section C shows services you can shop for, like title insurance. Calculate your break-even point by dividing total closing costs by your monthly payment savings.

Share the Loan Estimates with different lenders and ask them to match or beat specific fees. Many lenders will negotiate origination fees or waive application charges to win your business.