by 
The Curious Bag
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When a borrower refinances his mortgage, he is required to pay closing costs, or fees, to complete the transaction. The fees vary based upon the mortgage type and the loan amount.
Significance
According to the Federal Reserve, a borrower's closing costs when refinancing a home can range from 3 percent to 6 percent of the loan amount. This can add up to thousands of dollars.
Function
The closing costs pay for each function of the transaction. This includes paying the lender, appraiser, closing agent and all applicable taxes.
Types
The fees can be fixed, based on the service, such as the appraisal and closing services. The fees can also be variable, based on the loan amount. For example, the taxes charged to the borrower are based on the loan amount.
Considerations
Many of the fees associated with closing costs are negotiable and a smart borrower will discuss these fees with a lender to see if any can be reduced.
Benefits
Choosing your current mortgage lender to do your refinance may result in even more reduced fees than with negotiation. Repeat customers may not need the same documentation, such as an appraisal, as new customers.
Source:
FederalReserve.gov: A Consumer's Guide to Mortgage Refinancing
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