Refinancing · Costs
What refinancing costs, line by line.
TL;DR: Compare Section A's fees and points alongside lender credits. Everything else pays an outside firm or covers your own bills, so those lines should look much the same from lender to lender once the loan and closing date match. Credits and financed costs cut cash due without making charges go away.
How much does it cost to refinance a mortgage?
Running Finance and Capital Markets at a large mortgage lender taught me the best way to understand loan costs is to "follow the money." A lender's own charges for making a loan sit in exactly one place on the Loan Estimate: Section A. All other costs are paid to outside providers or cover bills you would owe with or without a refinance.
So, when comparing estimates, look at Section A, including discount points, and any lender credits in Section J. The other costs may move with your closing date, but should otherwise be similar from lender to lender.
Start with page 1 of the Loan Estimate. Read the loan amount, interest rate, and monthly principal and interest payment. Check the Rate Lock box: is it checked, and until when? Look at the estimated property value, or the sale price on a purchase, and the estimated total monthly payment. Then read the two totals at the bottom: estimated closing costs and estimated cash to close.
What's in the four cost buckets?
The CFPB's Loan Estimate rule splits Loan Costs from Other Costs.
Lender pricing: A. Origination Charges
These fees are set by the lender or your loan originator and paid to them: origination, application, underwriting, processing, and rate-lock. Discount points are also paid to the lender, in exchange for a lower rate. Compare these fees alongside the rate and any lender credits to see what each lender actually charges.
The annual percentage rate (APR) on page 3 further helps you compare across lenders by folding certain loan costs into the rate. The interest rate determines your principal and interest payment; APR reflects the cost, as the CFPB explains.
Outside services: B, C, and applicable H items
Outside firms do some of the required work on your loan - the appraiser, credit bureau, flood and tax research services, surveyor, closing agent, and title insurer. They set their own prices; the lender just lists them and passes them through. These appear in Section B (firms the lender picks), Section C (firms you can choose), and Section H for the optional Owner's Title Policy. A difference here may represent a different scope of work, not different lender pricing.
Government charges: E. Taxes and Other Government Fees
These fees are to record your loan on public record, and in some cases cover transfer taxes, which are paid at closing to government offices at rates set by the government. Which ones apply depend on the loan and property location. No lender sets these rates, so if estimates differ for the same loan, ask why; a smaller estimate doesn't mean a smaller bill.
Bills and reserves: F. Prepaids and G. Initial Escrow Payment at Closing
Section F covers bills you will owe as a homeowner or borrower, just paid at closing: homeowner's insurance, mortgage insurance, prepaid interest, and property taxes, whichever apply. Insurance and taxes go to your insurer and tax office, while prepaid interest goes to your lender.
Prepaid interest covers the days between closing and the start of your first full payment period; the amount depends on when you close and your rate, so it is a matter of timing, not an extra fee.
Section G is money the servicer holds to pay those insurance and tax bills when they come due. The lender decides how much to set aside, but doesn't set the bills themselves. A smaller escrow deposit isn't a discount, it just means less money is being held for you.
How might individual lines look?
Section A is where lenders truly differ; everything else is passed through or set aside for your own bills. Athena's fee structure is outlined in the FAQ below. To see where each line sits on the form, use the CFPB's sample Loan Estimate, which walks through a completed form section by section.
How do lender credits and financed costs change cash to close?
Both lower the funds you bring to closing; neither makes closing costs go away. A lender credit is money the lender puts toward your closing costs, usually in exchange for a higher rate. Financing costs into the loan reduces cash due, but it also raises the balance on your loan, so you pay interest on those costs for as long as the loan is outstanding.
Why don't loan-cost totals equal cash to close?
The Loan Estimate does the math for you. Section D includes lender pricing and outside services, Section I includes government charges, bills and reserves, and Section J adds the two together and subtracts any lender credits.
Even Section J usually isn't your check amount. Cash to close starts there and then adds what is being paid off and subtracts what your new loan provides. Don't read the loan costs line as your check amount; it is a piece of the answer, not the answer.
How do you compare two Loan Estimates?
- Start with the same loan. Use the same loan amount and term on both estimates. Rates move, so estimates from different days may reflect market movements.
- Compare lender pricing. Look at Section A together with the rate and any lender credits in Section J. These move as a package: a lender credit usually comes with a higher rate, and discount points buy a lower one.
- Match outside charges. In Sections B, C, and E, make sure you're looking at the same services and the same government charges. The lender doesn't set these prices, so a difference here may be a difference in what's being estimated, not in what you'll pay.
- Separate timing from price. Sections F and G are prepaid bills and escrow reserves and can shift with your closing date. Also check whether either estimate rolls costs into the loan; that lowers your cash at closing but increases what you owe.
Frequently asked questions
Can I use average closing costs to refinance as my budget?
Not really. An average won't tell you which costs will apply to your specific loan. Use it for a rough indication, and your Loan Estimate as your budget - expecting some lines to change before closing.
Are all closing costs lender fees?
No. Section A is the lender's own charges. The rest pays outside firms, goes to public offices, or covers bills you will owe as a homeowner or borrower, paid now or set aside for later. Athena's pricing policy:
No lender fees. Zero points required.* Third-party and prepaid costs (appraisal, credit, title, recording, and interest from closing to your first payment) still apply.
*Full pricing policy and footnote: athenamoney.co/pricing/
Does a smaller cash-to-close figure mean lower costs?
No. Cash to close is what changes hands on closing day, not what the loan costs. Cash is lower when costs are financed, when you have a lender credit, or when escrow estimates are lighter; financing and lighter estimates are not discounts, and a lender credit usually comes with a higher rate. Comparing Section A, the rate, and the loan amount is a better way to compare costs.
Which figure goes in the break-even calculator?
Use the Total Closing Costs line (Section J) on your Loan Estimate. If you don't have one yet, use a lender's total closing-cost figure quoted in writing. Note that the calculator treats these costs as paid up front, so if you roll them into the loan amount it won't calculate your additional interest or compare your remaining balance.
Does checking my options affect my credit?
At Athena, checking your options uses a soft credit pull and does not affect your credit score. If you continue the application, Athena requests a full credit report from one or more consumer reporting agencies. This is a hard inquiry and may affect your credit.
Put the lines to work. Use the refinance break-even calculator with your own figures.
Related reading
Use the refinance break-even calculator. Read when refinancing is worth it, how refinancing a mortgage works, how a cash-out refinance works, and how much equity a cash-out refinance needs. Explore Athena's refinancing overview.
About this article
Written by Laura Bowles, Chief Financial Officer
Reviewed by Pete Amstutz, President and Co-Founder
Published October 9, 2026
Sources:
- CFPB, Loan Estimate rule and interpretations. Read September 7, 2026.
- CFPB, Loan Estimate rule, calculating cash to close (§1026.37(h)): cash to close is calculated from loan funds, closing costs and payoffs; the payoff of the old mortgage is not a closing cost. Read September 7, 2026.
- CFPB, Loan Estimate explainer with a sample form. Read September 9, 2026 (Pacific).
- CFPB, Interest rate versus APR. Read September 9, 2026 (Pacific).
- FFIEC/CFPB, Public HMDA: LAR Data Fields, total_loan_costs: the public field total_loan_costs is reported in dollars; lender credits, origination charges and discount points are separate fields. Read September 7, 2026.
- Athena, pricing and calculator. Read September 7, 2026 (supplied copy and disclosures; live pages not accessed).
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