Appraisal and Inspection Fees

• You must get the home appraised during the refinancing process to determine its current value. The lender commonly arranges the appraisal and pays the service provider after closing. The same is true for the home inspector, if required by the lender. In some cases you must also pay a fee for a service provider to survey the land on and near the property as a condition of the loan.
  
  

Lender Fees

• The lender's charges make up a significant amount of the closing fees for a refinanced home loan. The origination fees cover the loan officer or broker's charges for arranging and helping to close the loan. Another common charge is for the lender's lawyer, if needed, to review paperwork for the loan. If your previous loan came with a prepayment penalty, which is a charge for paying off the loan early, you must also pay that cost if it applies.
  
  

Insurance Fees

• You're required to pay insurance fees when refinancing a home. The lender requires title insurance to protect the title to the house. You must also pay the cost to renew your homeowner's insurance policy. If the new mortgage loan balance is more than 80 percent of the appraised market value, the lender may require private mortgage insurance (PMI) as a condition of the loan.
  
  

Other Possible Fees

• Some mortgage lenders charge an application fee for refinancing. You also may have to pay prepaid interest fees, depending on the time of month you close the loan. Prepaid interest is the interest expense for each day of the month after the funds are disbursed to pay off the old mortgage. An optional expense is the cost of one or more mortgage discount points. A discount point equals 1 percent of the borrowed amount and reduces the interest rate.