You can expect to pay between 3% and 6% of the principle amount of your mortgage in closing costs. You can either roll the closing costs into the mortgage amount or pay for them with cash. If possible, pay the closing costs up front to avoid paying interest on them for the life of the loan.
Consider all of your options
- Cash out refinance: Borrow an amount greater than what you owe on your home so you can receive the difference in a cash payment.
- Rate and term refinance: You can change the interest rate and/or the term of the loan.
- Streamline Your FHA Mortgage: Your interest rate or repayment period changes, but your credit and debt-to-income ratio are not evaluated as part of the approval process. In order to qualify, your resulting monthly payment must be lower than your current payment, and it must be an FHA or VA loan.
- Making Home Affordable: This is a program designed for people holding a Fannie Mae or Freddie Mac mortgage who owe more than their home is worth. To be eligible, you must be current on your mortgage payments.