Refinance rates refer to fees assessed by lenders when refinancing mortgages. Borrowers take out a new home loan and undergo a similar loan process as they did when taking out the original mortgage note.

Refinance rates can range from a few hundred to several thousand dollars. Much depends on lender requirements and borrowers’ credit history and fico score. Common refinance rates include: loan origination and application fees, real estate appraisals, property inspections, lawyer review, and closing settlement costs.

In addition to refinancing fees, mortgagors may also be subjected to prepayment penalties. Borrowers should review their original mortgage note to determine if a prepayment clause exists. Some lenders include this penalty if loans are paid off within the first five years of origination. Others assess a penalty throughout the duration of the loan, while some lenders do not include penalties at all. If prepayment penalties are imposed they generally range between 2- and 4-percent of the loan value.

In order to obtain the best refinance rates, borrowers should spend time shopping mortgage providers. Two reliable sources include BankRate. com and MortgageLoan. com. Both websites publish links to nationwide lenders, along with interest rates and consumer ratings.

Visitors can use online mortgage calculators to determine costs and savings of refinancing mortgages. Mortgagors can enter outstanding balances of home loans, interest rate, property tax rate, mortgage and property insurance premiums, appraised property value, and number of payments remaining.

After plugging in mortgage costs, borrowers receive an estimate of refinanced mortgage principal, interest, loan term options, and settlement costs to evaluate potential savings and anticipated refinance rates.

If borrowers want to proceed with mortgage refinancing they should contact the chosen lender to obtain an estimate of anticipated fees. Lenders review borrowers’ current home loan and provide a good faith estimate of fees incurred by the bank. Estimates do not include services which might be required through third-party providers such as real estate appraisals and property inspections.

Property appraisals are required to determine current market value and ensure lenders do not provide more money than the property is worth. Some banks include appraisal costs in the refinance rates, while others require mortgagors to hire a property appraiser. Real estate appraisals typically cost between $300 and $700.

Property inspections are required to determine property condition. Inspection fees range usually range between $150 and $400.

Mortgagors might also be charged refinance rates for property records search, survey fees, loan points, flood monitoring and certification, and title insurance.

Mortgage refinance requires borrowers to apply for a new loan and submit financial records to verify they meet lending criteria. The process of refinancing can sometimes be cumbersome, but when borrowers can save thousands over the term of the note it is worth the effort.

Those uncertain about refinancing should consult with a mortgage counselor or certified housing counselor. The Department of Housing and Urban Development provides a list of nationwide housing counselors at HUD. gov.