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? re: closing costs for anyone who refinanced their mortgage

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ODonnell
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Member since 9/05

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? re: closing costs for anyone who refinanced their mortgage

We're looking to refinance our mortgage in a few months to reduce the term of the mortgage (providing the rates remain this low and don't go up before that). Could you give me an idea of what the closing costs were on a refiniance? I did refinance my mortgage when I had a co-op, but those fees were only $1,500.

Would it be a good estimate to say half of what the closing costs were on the original mortgage? Say it was $10K, would $5K cover the refinance?

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Posted 1/3/08 4:16 PM
 
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csorisi
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Member since 11/05

1984 total posts

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Corinne

Re: ? re: closing costs for anyone who refinanced their mortgage

Unless your interest rate is going to change substantially I would put the 10k or 5k toward my principal and that will automatically lower your term. Ex: If you interest rate right now is 6.75 and the current rates are 6.25/6.375 there is no savings just to lower the term (that is if you don't pay points). It would be more worth it to make extra payments toward principal. One extra payment over the life of your loan will reduce your loan to 22 years, 2 extra payments would lower it ot 15 years. If you are looking for a 15 to 20 year term then you can still have it if you just pay toward principal every month. Also if you don't want to stay in your house more then 5 more years it isn't worth it either. I know that wasn't really your questions but to answer your question your refinance could cost around the same that you spend on your initial closing. You have to pay mortgage tax again, the bank will need title insurance, if you buy down the rate you will have to pay points and you may have to give toward the escrow and all the other fees that you originally paid at the closing of your home. In the end it may not be worth it.

This of course just my opinion but a refinance could cost just as much because you are paying for the same things you paid for at your closing. good luck in whatever you decide.

Posted 1/3/08 6:41 PM
 

ODonnell
.

Member since 9/05

5983 total posts

Name:

Re: ? re: closing costs for anyone who refinanced their mortgage

Posted by csorisi

Unless your interest rate is going to change substantially I would put the 10k or 5k toward my principal and that will automatically lower your term. Ex: If you interest rate right now is 6.75 and the current rates are 6.25/6.375 there is no savings just to lower the term (that is if you don't pay points). It would be more worth it to make extra payments toward principal. One extra payment over the life of your loan will reduce your loan to 22 years, 2 extra payments would lower it ot 15 years. If you are looking for a 15 to 20 year term then you can still have it if you just pay toward principal every month. Also if you don't want to stay in your house more then 5 more years it isn't worth it either. I know that wasn't really your questions but to answer your question your refinance could cost around the same that you spend on your initial closing. You have to pay mortgage tax again, the bank will need title insurance, if you buy down the rate you will have to pay points and you may have to give toward the escrow and all the other fees that you originally paid at the closing of your home. In the end it may not be worth it.

This of course just my opinion but a refinance could cost just as much because you are paying for the same things you paid for at your closing. good luck in whatever you decide.



Good points. Thanks. We will weigh it all up.

Posted 1/3/08 8:53 PM
 
 

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