Definition

Closing costs are the one-time fees to complete a real estate transaction — lender fees, appraisal, title insurance, taxes, and more — typically running about 2% to 5% of the loan amount. They are central to deciding whether a refinance pays off, since the monthly savings must first recoup these costs.

1. When Does It Make Sense to Refinance Your Mortgage?

   Refinancing can save thousands over the life of a mortgage — or cost more than it saves if you do it at the wrong time. Here is how to calculate whether refinancing makes sense for your situation.
   real estate

1. Refinance

   Replacing an existing mortgage with a new one, usually for a better rate or term.
2. Down Payment

   The upfront cash you pay toward a home, with the rest financed by a mortgage.
3. Escrow

   A neutral holding account for funds during a transaction or for ongoing tax and insurance payments.