Cash-Out Closing Costs: Points and Lender Credits

Considering a cash-out refinance? The cash you receive is only one part of the comparison. Start with the closing costs and how the new loan is priced.

A refinance can involve origination charges, an appraisal, credit and title services, recording, and other settlement expenses. The amount varies by loan, property, lender, and location. Costs may be paid at closing, reduce the cash you receive, or be added to the new balance. Adding them means borrowing more, which may increase payments and reduce equity. ^{1 2}

Now compare points and lender credits. A discount point is an upfront fee—generally one percent of the loan amount—in exchange for a lower interest rate. A lender credit can reduce what you pay upfront, but usually comes with a higher rate. Neither is automatically better. Consider your available cash, how long you may keep the new loan, and total cost—not only cash at closing. ¹

Request written Loan Estimates with the same loan amount and terms. Compare points, credits, cash to close, rate, APR, payment, and projected balance. A “no-cost” option is not necessarily free.

Important notes

• Educational information only; not legal, tax, financial, or lending advice.
• This script is not a loan offer, rate quote, commitment, approval, eligibility determination, or guarantee of costs, terms, cash received, payment, timing, or closing.
• Cash-out refinance costs, points, credits, rates, eligibility, and product availability vary with the borrower, property, transaction, lender, jurisdiction, and applicable requirements. No nationwide-lending or current individual/state/product-authority claim is made.
• “No-cost” does not mean free: a lender may offset costs through a higher interest rate or add costs to the loan amount. Confirm the structure in the written disclosures.
• Do not request or display Social Security numbers, income records, bank statements, borrower financial data, loan documents, or other sensitive information in a video, comment, or unapproved form. Use only an approved employer application system if a consumer later chooses to apply.