I was quoted a loan at 3.990% but my closing costs were $5,550 roughly. I'm just wondering if this is considered decent? Acceptable? Or am I taking it up the ass? Appreciate your input fellas. 
-
-
Jesus Christ...paid 1700 this year.
That sounds absurd.Comment -
Thru wells fargo...my dad said they paid 2200 last year thru their small local bank.Comment -
Typically 2-5%. It may not be a great idea to refinance, especially if you won't be there past the next 3-5 years. It helps to figure out your break even period.
How do you calculate the break-even period?
Use the step-by-step worksheet below to give you a ballpark estimate of the time it will take to recover your refinancing costs before you benefit from a lower mortgage rate. The example assumes a $200,000, 30-year fixed-rate mortgage at 5% and a current loan at 6%. The fees for the new loan are $2,500, paid in cash at closing.
Example Your numbers - Your current monthly mortgage payment
$1,199 - Subtract your new monthly payment
- $1,073 - This equals your monthly savings
$ 126 - Subract your tax rate from 1
(e.g. 1 - 0.28 = 0.72)
0.72 - Multiply your monthly savings (#3) by your after-tax rate (#4)
126 x 0.72 - This equals your after-tax savings
$ 91 - Total of your new loan's fees and closing costs
$2,500 - Divide total costs by your monthly after-tax savings (from #6)
$2,500 / 91 - This is the number of months it will take you to recover your refinancing costs
27 months
Tip: Calculate the financial benefit of refinancing in one, two, or three years. Does the benefit compare with your plans for staying in your home?Comment -
My closing cost was approximately $1,500 and this happened in the summer.....you sir are getting ripped off.
Locked in at just over 3%Comment -
While that's what I thought as well, The whole "not staying there for more than a couple years". It knocked my payments down 220 a month...So it'll pay for itself within a year, which I'm sure I'll be there for that long and if not, I'll still be holding onto the place as I won't be able to sell it. Most people I know refinancing now are dropping for mid 5's/6's to mid 3's.Comment -
It sounds like you got a better deal, Gates. In order for Moneyshooter to recoup his money back in 1 year, he'd have to be saving 462/month. I bet he's saving less than 200/month. Either way it still helps to know the break even period.Comment -
Current Loan:
6.875% $1,092.14 A Month (Loan was 5 years ago No Doc)
New Loan:
3.990% $772.96 A Month (HARP Program Loan) No Doc.Comment