If you're looking to refinance, it's going to be a mixture of good news and bad news. Say goodbye to your old mortgage and interest rate but say hello to settlement and loan processing fees. The same or similar types of fees apply. And those fees can make the deal much less attractive, so be sure to research closing and loan processing costs carefully before signing the dotted line. On a traditional refinance, count on paying approximately 2 to 5 percent times your loan principal in refinancing costs.
Fees do vary considerably between lenders, so be sure to shop around.
Just remember to compare the interest rate, too. Another option is to fold the fees into the amount of the loan and make a slightly higher monthly payment, rather than pay the fees up-front. Higher discount points are the tradeoff for a lower interest rate. This pre-paid finance charge is what you'll pay at closing to get a lower rate. One point is 1 percent of the loan amount.