Great information from Mortgage.info about the closing costs associated with a new home purchase or a refinance.

1. A Complete List of Closing Costs For a Refinance or New Mortgage
The average home buyer incurs mortgage closing costs which are equal to 2% to 5% of the
property price. The same costs for refinance are between 3% and 6% of the outstanding principal
on the existing home loan. On average, the costs for both types of financial products are around
$4,000 but this is a very general figure given that they are dependent on the property price. Take
a closer look at each cost which you will incur when you refinance or take out a new home loan.
Application Fee
This type of fee covers the initial processing of your loan application and the checking of your
credit report. Most loan applicants pay an application fee around $350, but this is a median
figure. You may actually end up paying over 5 times less.
Origination Fee
All lenders charge origination fees. They cover the lenders' costs associated with evaluating and
preparing the new mortgage or the refinance loan. These fees are typically calculated as a
percentage of the loan principal. The percentage does not typically exceed 1.5%.
Discount Points
Many borrowers choose to buy discount points so that they can lower the interest amount which
they will pay over the term of the new mortgage or the refi loan. This is not mandatory, however.
The average borrower spends up to 3% of the loan principal on discount points.
Attorney Fees
These fees are incurred by the lender for the legal closing of the refinance or new mortgage deal.
They are transferred to the borrower. Typically, they do not exceed $1,000. Sometimes, they are
added to the origination fee.
Appraisal Fee
Lenders require property appraisal to ensure that the value of the house purchased is worth at
least as much as the loan amount. The appraisal fees typically do not exceed $500.
Survey Fee
This fee is paid for verifying the lines of the property. It is paid only when a new mortgage is
taken out. It is not included in the closing costs for refinancing.
Inspection Fees
Most lenders require home inspection to ensure that the property is in good structural condition
and that all systems like the plumbing and electrical one are working properly. You can expect to
pay such fees as a first time home buyer and when you are refinancing a mortgage as well.

2. Title Search and Title Insurance Fees
The lender will perform a title search to confirm the legal ownership of the property and you have
to pay for it. Title insurance covers the lender against errors in the search. The insurance fees are
incurred by the borrower.
Escrow Deposit
Most lenders require an escrow deposit to ensure that property taxes and the private mortgage
insurance fees for the first couple of months will be paid on time. You will have to put a set
amount of money in the escrow account at the time of purchase of the property. The lender will
use the funds to cover the costs mentioned above. Given the way in which the escrow deposit is
used, it is not required for refinancing.
Recording Fee
This fee is paid for the recording of the documents for the new property ownership. It is fairly
small so it should not add greatly to your budget.
Prepayment Penalty
This fee may be charged when an existing mortgage is paid off with a refinance loan. Only
private lenders can charge this type of fee. Government-backed loans like the FHA loans and
ones granted by government credit unions do not have such a fee. It is actually prohibited in
many states. In any case, you must check whether you will owe such a fee when you refinance. It
is typically the sum of the interest payments for up to six months.
Lenders are legally required to provide a good faith estimate of the home loan closing costs so
you will have a general idea of how much you will owe. Just keep in mind that the actual costs
may be up to 10% higher than the estimate.
Experts recommend that borrowers stay away from the so called no-cost mortgages and
refinance. This is because the costs are typically added to the principal or the lender charges a
higher interest rate. Any of these strategies makes the costs much higher even though their
payment will be spread over a period of time.