Origination Fee

• The origination fee is a lender fee that is incurred as the loan paperwork is created. This is used primarily as payment for the lender. While other fees have base dollar amounts, such as $450 to $700, the origination fee is usually based on the principal of the mortgage. The common fee percentage is 1 percent of the loan. Larger loans may incur higher percentages, but it is rare that a fee will be more than 1 to 2 percent.
  
  

Point Fees

• Discount points are specific discounts that borrowers can purchase in order to lower the interest rate on their refinance package. One discount point is always equal to one percentage point of the principal. For a $100,000 mortgage, one discount point would cost $1,000. Typically, a single point decreases the rate between 0.25 and 0.5 percent, depending on how low the rate already is and the size of the mortgage.
  
  

Title Insurance

• Title insurance is a specific type of insurance that homeowners are typically required to purchase as part of the mortgage process. This cost may not be included in a refinance, but some lenders will require it no matter what. The title insurance fee is typically 0.5 percent of the loan. This insurance protects the borrower in case there are unexpected or undiscovered liens on the property which may lead to later lawsuits.
  
  

Mortgage Insurance Upfront

• Mortgage insurance is typically required with a low down payment, such as those insured by the Federal Housing Authority. In the FHA loan, for instance, borrowers must pay a premium as part of the closing costs. This premium is set at around 1.5 percent of the mortgage. Borrowers can use an FHA refinance, but this premium will still apply, unless the borrower has already paid off a large percentage of the previous loan and stored up equity in the house.