CoreLogic’s ClosingCorp has released its second annual Refinance Closing Cost report for 2021. One of the key takeaways shows that the national average closing costs for a single-family property refinance in 2021, excluding any type of recordation or other specialty tax, was $2,375. While this is up $88, or 3.8%, from 2020’s reported amount of $2,287, it is still less than 1% of the average refinance loan amount, which was $304,909. By contrast, CoreLogic issued its 2021 Purchase Closing Cost Report and reported the national closing costs average $3,860, excluding transfer and specialty taxes.
The major differences between average closing costs for refinances versus home purchases is that owner title insurance and several inspection fees common for purchase transactions are not typically required for refinances. Still, most third-party fees, including lender title, settlement service and land surveys, were also lower for refinances.
“In 2021, homeowners were still able to get good deals on both interest rates and closing costs,” says Bob Jennings, an executive at CoreLogic Underwriting Solutions. “While refinance closing costs increased marginally, annual increases in fees still remain below the 7 percent average rate of inflation seen in 2021. Much of the cost control can be attributed to growing use of technology solutions by both lenders and settlement services providers, which enabled the industry to scale up capacity while holding the line on closing costs.”
The 2021 report shows 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 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, Fla. ($4,922); Arcadia, Fla. ($4,756); and Kahului-Wailuku-Lahaina, Hawaii ($4,651).
Refinance cost calculations include lender’s title policy, appraisal, settlement, recording fees, and various state and local taxes. Calculations use home price data from CoreLogic to estimate closing costs for an average home at the state, core-based statistical area (CBSA) and county levels. Ranges, rather than single values, are used to more accurately capture fees associated with the real transactions.