Help me decipher the refinancing closing cost

[Binarycow]

OK, help me out people 🙁 I'm lost here.

We're going to close on our home refinancing in about 4 hours. "only" took 2.5 months for WellsFargo to cross all the t's and dot all the i's :'(. They faxed me the HUD paperwork and looking at all the figures I realized I had no idea what some of them were about. The darn thing is 5 pages long filled with mostly gibberish (to me).

I'm just going to high-light some main figures listed and if anyone could tell me if they are around the right ball park that would be much appreciated.

We owe $118,800 on the old mortgage and borrow 120,000 to refinance (with the same company). We still have about $2400 in our old escrow acct which will be rolled over to the new acct. Our property tax which is due in 1.5 months is about $2500. Annual insurance is about $1100. The check we have to bring to the closing cost is a bit less than $1700.

Does $1700 sound like a reasonable amount (give or take a few hundred bucks)?

 

[Paladin]

You couldn't roll that $1700 into the loan so you didn't have to pay out of pocket? It all sounds about right, just make sure they setup the new impounds on your account correctly (looks like it's ok with the $2400 rolled over). What APR did you get?
Just my finished refi, 4% on 30 yr.
Man, wish my mortgage was that low. 🙁

 

[rudder]

You couldn't roll that $1700 into the loan so you didn't have to pay out of pocket?

Then aren't you taking 15-30 years to pay off that $1700? Just use the jack you would be paying for the mortgage payment that now will not be due for two months in some cases.

 

[mshan]

Sounds like you are confusing pre-paid escrow items with closing costs?

Someone previously got a mortgage (don't think it was a refi) and said he wife worked at bank and thought actual costs were $1500 - $2000; refi costs should be lower. Especially with same lender, who presumably uses same title company, they should be able to reissue title insurance at lower cost since they only have to search since original title insurance was issued to same person on same house.

Rule of thumb about rate reduction required to make refi make sense was take mortgage balance and divide by $125,000 and that is minimum rate reduction required to make refi make sense (slightly higher in NY and FL because of higher closing costs):

http://video.cnbc.com/gallery/?video=3000050857

Don't know if you have time, but this lady offers GFE review for low fee: http://askcarolynwarren.com/page11/page11.html

And I assume you are in early years of current mortgage where most of payment is still interest and not principal.

 

[EagleKeeper]

You couldn't roll that $1700 into the loan so you didn't have to pay out of pocket?

Then aren't you taking 15-30 years to pay off that $1700? Just use the jack you would be paying for the mortgage payment that now will not be due for two months in some cases.

The payments that you "miss" is interest that you will pay for the length of the loan.

Better to make the payments anyhow to shorten the loan and build back the equity.

It is probably to late now; but one should shop for Title companies. Many lenders are not picky on what one they use and fees can be higher.

A refi for our place from the lender was 400 higher than me using the original title company from the initial purchase.

Any line item that you do not understand; get WF to explain before closing. They can easily pad in a couple of hundred for unneeded fees is allowed.

 

[Binarycow]

thx, people. Theoriginal loan was 200k borrowed about 4 years ago. we figured the whole thing would cost us a bit under 3k but will end up saving about 14k in interest. btw, the new loan is 3.25% for 10 years. hopefully, we will get it paid off in about 6 years.