Refinance closing costs remain at less than 1% of loan amount in 2021 – NMP
Refinancing fees in 2021 were less than 1% of loan closing costs. This was well below the closing costs of buying.
The second annual CoreLogic Refinance Closing Costs Report indicates that the national average closing costs for a single family home refinance in 2021, excluding any type of registration or other specialized tax, was $2,375. $. That was up $88, or 3.8%, from 2020. The average refinance loan size was $304,909 in 2021.
“In 2021, homeowners could still get great deals on interest rates and closing costs,” said Bob Jennings, director of CoreLogic Underwriting Solutions. “Although refinancing closing costs have increased slightly, annual fee increases remain below the average inflation rate of 7% seen in 2021. Much of the cost containment can be attributed to the growing use of solutions technologies by lenders and settlement service providers, which has allowed the industry to increase capacity while containing closing costs.” CoreLogic, a provider of data and technology on financial Real Estate for the Mortgage and Real Estate Services industries said the national average purchase closing cost was $3,860, excluding transfer and special taxes, representing a 13.4% increase from 2020 .
The main differences between average closing costs for refinances and home purchases are that homeowner’s title insurance and several common inspection fees for purchase transactions are generally not required for refinances, according to CoreLogic. Yet most third-party fees, including lender title, settlement service, and surveying, were also lower for refinances.
The 2021 report shows that the states with the highest average closing costs, excluding specialty taxes, were Hawaii ($4,730), New York ($4,679), Florida ($3,956), Texas ($3,588 $) and the District of Columbia ($3,370).
The states with the highest closing costs, including taxes, were New York ($10,084), Pennsylvania ($7,614), Delaware ($7,223), Florida ($5,821) and California ( $5,762).
At the metro level, those with the highest average fees without taxes include Key West, Florida ($4,922); Arcadia, Florida ($4,756) and Kahului-Wailuku-Lahaina, Hawaii ($4,651).
Refinance cost calculations include the lender’s title policy, appraisal, settlement, registration fees, and various state and local taxes. The calculations use home price data from CoreLogic to estimate closing costs for an average home at the state, Central Statistical Area (CBSA), and county levels. Ranges, rather than single values, are used to more accurately capture fees associated with actual transactions.