Why do refinance quotes look great until the closing costs show up? What fees are unavoidable?

Why don't refinance quotes show closing costs upfront?

Refinance quotes often highlight the interest rate and monthly payment savings but don't show the full closing cost breakdown until later in the process. Some fees are unavoidable when refinancing—these cover the lender's work to process and approve the new loan.

Unavoidable fees typically include the application fee, credit report fee, appraisal fee, and title search. The loan origination fee covers the lender's processing work. You'll also see government recording fees and title insurance costs. These fees exist because the refinance creates a new mortgage that replaces your current loan.

Check the Loan Estimate you receive within three business days of applying—this document shows all fees upfront. Compare the closing costs section across different lenders, since some fees vary by lender while others (like government recording fees) stay the same. Some lenders offer no-closing-cost refinances where they roll the fees into your loan balance or interest rate.

Share your Loan Estimate with each lender and ask them to explain any fees that seem higher than expected. Most lenders can walk you through which fees are required versus optional services you can shop for separately.