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If you live in Alabama, Georgia, Mississippi, Florida, or Tennessee, you are eligible to become a member. Depending on your individual eligibility, we may require membership into an approved association at no cost to you.

You can also qualify for membership by being a family member of a current or potential Listerhill member.

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Calculating Mortgage

How Much Does It Cost To Refinance Your Mortgage?

Learn more about the processes and costs behind refinancing your mortgage.

Editorial Note: Articles published are intended to provide general information and educational content related to personal finance, banking, and credit union services. While we strive to ensure the accuracy and reliability of the information presented, it should not be considered as financial advice and may be revised as needed.

Refinancing your mortgage can be a useful financial option. Refinancing can help you whether you need to decrease your monthly payments or the amount of interest you'll pay over the life of the loan.

But no good thing in life is truly free. How do you tell if the price you have to pay to get a better mortgage is worth it? On average, how much does it cost to refinance a mortgage?

We’re here to make the process more transparent so you can best decide if refinancing is a good option for you.

Mortgage Refinancing Cost Guidelines

In general, it costs between 2-5% of your mortgage’s principal to refinance your home.

To get a precise estimate of closing costs, you’ll have to factor in all of the fees required by your new mortgage. What kind of things do you have to consider, though? Most of the costs associated with refinancing are similar to the costs for your original mortgage.

Here’s a list of the most typical items you’ll have to cover and their estimated costs.


Early Repayment Fees

1-5% of your outstanding balance

Insurance Fees

Up to $900

Appraisal and Inspection Fees

$400-500 for each

Application/Origination fees

1-1.5% of the new principal

Title Search/Title Insurance Fees

Up to $900

Flood Certification Fee

Up to $25

As you can see, origination fees are where you’ll see the brunt of the charges. They are the fees charged by the mortgage company for all things associated with processing and dispersing the new loan.

Getting A Good Deal On Mortgage Refinancing

Origination fees may be negotiable, depending on the lender. However, this usually comes at a cost. If you bargain for a low or no-origination fee mortgage, you’ll probably end up paying for it with slightly higher interest rates.

Getting a good deal on your new mortgage means first shopping around to familiarize yourself with the best prices. Once you have an idea of what a good APR is, you can then talk to mortgage lenders to see if you can negotiate a better deal.

Is The Cost To Refinance A Mortgage Worth It?

Weighing the fees associated with refinancing versus the cost to refinance is important to figure out if refinancing is a good move for you.

Refinancing can help you achieve lower interest rates, lower monthly payments, or a shorter mortgage term.

Lower interest rates

If interest rates have dropped since you first got your mortgage, you can benefit by lowering your APR and the total cost of your mortgage. To the same point, if your credit score has dramatically improved, this could help you access better APR.

Shorter-term

You can also take advantage of a lower APR to shorten your term without changing your monthly payments very much. This means you’ll pay off your mortgage faster and save money overall.

Lower monthly payments

If you’ve found your mortgage payments to be too high each month, refinancing can get you out of this situation. Refinancing in this case might not save you money over the life of the mortgage, but it will help free up money in your monthly budget.

Cash-out refinancing

A common tool that homeowners use to pay off their debts or access low-interest rate loans is a cash-out refinance. This replaces your old mortgage with a new mortgage for more than you owe.

This allows you to access your current equity in “cash.” This can be a good option if you are already planning to make home improvements or undertake a costly project.

Weighing The Cost Of Mortgage Refinancing

Determining if refinancing is a good option usually means weighing a short-term, one-time cost versus long-term benefits.

Shop around

A good first step is to shop around and determine the total costs you will incur by refinancing. You can ask for a summary of fees from potential lenders that puts a concrete price tag on the process.

Calculate the costs

Second, use a refinancing calculator to determine how much you will save over the life of the loan. This calculator can help you do that.

Also, figure out how long it will take you to recoup the costs of refinancing. If you subtract your new payment from the old payment, you can see how much you will save each month. Figuring out how long it will take to earn back the money spent can be useful if you’re planning to sell your home before you pay off the mortgage.

Finding The Best Mortgage Refinance Deal

Credit unions are one of the best places to look for mortgages. Especially if you are already a member!

Start your search today by checking out Listerhill Credit Union’s mortgage refinancing options and competitive rates.

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Frequently Asked Questions

  • What happens when federally insured credit unions merge?

    If a member has accounts in credit union A and credit union B, and credit union A merges into credit union B, accounts of credit union A continue to be insured separately from the share deposits of credit union B for six months after the date of the merger or, in the case of a share certificate, the earliest maturity date after the six-month period. In the case of a share certificate that matures within the six-month grace period that is renewed at the same dollar amount, either with or without accrued dividends having been added to the principal amount, and for the same term as the original share certificate, the separate insurance applies to the renewed share certificate until the first maturity date after the six-month period. A share certificate that matures within the six-month grace period that is renewed on any other basis, or that is not renewed, is separately insured only until the end of the six-month grace period.

  • What happens if a federally insured credit union is liquidated?

    The NCUA would either transfer the insured member's account to another federally insured credit union or give the federally insured member a check equal to their insured account balance. This includes the principal and posted dividends through the date of the credit union's liquidation, up to the insurance limit.

  • If a credit union is liquidated, what is the timeframe for payout of the funds that are insured if the credit union cannot be acquired by another credit union?

    Federal law requires the NCUA to make payments of insured accounts "as soon as possible" upon the failure of a federally insured credit union. While every credit union failure is unique, there are standard policies and procedures that the NCUA follows in making share insurance payments. Historically, insured funds are available to members within just a few days after the closure of an insured credit union.

  • What happens to members with uninsured shares?

    Members who have uninsured shares may recover a portion of their uninsured shares, but there is no guarantee that they will recover any more than the insured amount. The amount of uninsured shares they may receive, if any, is based on the recovery of the failed credit union's assets. Depending on the quality and value of these assets, it may take several years to conclude recovery on all the assets. As recoveries are made, uninsured account holders may receive periodic payments on their uninsured shares claim.

  • What happens to my direct deposits if a federally insured credit union is liquidated?

    If a liquidated credit union is acquired by another federally insured credit union, all direct deposits, including Social Security checks or paychecks delivered electronically, will be automatically deposited into your account at the assuming credit union. If the NCUA cannot find an acquirer for the liquidated credit union, the NCUA will advise members to make new arrangements.