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wtf closing costs!

M

mizzou

Diamond Member
My bank wants $4500 to close on a refinance of a $100k mortgage

Daaaamn

How the hell is that justifiable? Freakng appraisals are $150 and paperwork cant cost much more then that
 
mizzou said:
My bank wants $4500 to close on a refinance of a $100k mortgage

Daaaamn

How the hell is that justifiable? Freakng appraisals are $150 and paperwork cant cost much more then that
Click to expand...

Over the life of the loan how much are you saving by refinancing?
 
How long do you plan to stay in the house (x months) and how much do you save per month (y dollars/month) by refinancing?

If x * y > $4500, then it's a good deal. If x * y < $4500, why are you trying to refi?
 
the closing costs on our home purchase of $345,000 is estimated to be around $12k.

sounds kinda on par for your rates considering the amounts.
 
$4500 is pretty high. The best offer I've gotten is closing costs around $2k for a $155k refi.
 
Here we go again. Maybe you should be marching with the rest of the "whoa is me" crowd today. If you don't like it, go somewhere else OR don't refinance at all.
 
alfa147x said:
Over the life of the loan how much are you saving by refinancing?
Click to expand...

I can pay my remaining balance due in full early in like 7 years.

So if i was crazy enough to refi with my credit union, and im not, it would take two - three years to get my refi money back.

Add into less paid into principle from new 30 year mort. Then maybe id start breaking even after four ears.

All is for naught anyway because i no longer have 20% equity, just curious at rates with my local credit union
 
CPA said:
Here we go again. Maybe you should be marching with the rest of the "whoa is me" crowd today. If you don't like it, go somewhere else OR don't refinance at all.
Click to expand...

I dont need to refi, i was just curious and amazed how high the costs are

/sympathy not needed
 
Closing costs are often used as hidden points; they allow the refinancing bank to make their required ROR while offering a lower stated APR.
 
One wanted an extra 3500 because the VA was tied to my primary. 2&#37; up front for VA paperwork to save 2% on rate. Payments would drop a couple hundred.

Advantage on redo is that you already are in the door and you can tell the shafters where to go.
 
Another thing to consider is the relative costs of paying it off quickly. Say your interest rate is currently 6&#37; on that $100k and you could pay it off in 10 years (that's a $1110/month payment). Over the life of the loan you would pay $33,224.60 in interest.

Now lets say you refinance at 4% and a 30 year. The monthly payment is $477.42, and if you do the full 30 years you'll pay over $70k in interest (plus the $4500 in closing costs up front). However if pay extra each month (say an additional $622.58 to get it up to the $1110 from before) you'll pay off the loan in 9 years and only pay $19333.41 in interest. For a total cost of $4500+$19333.41=$23833.41 (well, I suppose you should consider the future cost of $4500 paid now, but let's not complicate things too much).
The numbers look even better for a 15 year since the rates are so low for that. At 3.25% and paying extra to get to that same $1110 you'll only pay $13380.45 in interest.

So with the number I gave it does make sense to refinance if you plan to stay in the house that long. With different numbers and different plans it might be cheaper to just apply that $4500 costs right at your current principal.
 
CPA said:
Here we go again. Maybe you should be marching with the rest of the "woe is me" crowd today. If you don't like it, go somewhere else OR don't refinance at all.
Click to expand...

I'm refinancing through my bank and they offer some partial point discount so the closing costs are only $1600. Isn't Valley National Bank offering $500 closing costs? seems it's only NJ/Pa
 
Is this including escrow balances and taking into account that you might not have to pay a month's mortgage while it's being processed? Shop around, but that is not that abnormal depending on your area.

Every time we have refinanced our $185k mortgage it's been 6-7k closing (3 different companies we have closed with, and we always shop around).
 
Wyndru said:
Is this including escrow balances and taking into account that you might not have to pay a month's mortgage while it's being processed? Shop around, but that is not that abnormal depending on your area.

Every time we have refinanced our $185k mortgage it's been 6-7k closing (3 different companies we have closed with, and we always shop around).
Click to expand...

Yeh, have them give you the good faith estimate of settlement costs. I'm guessing you have a 45 day interest payment lumped in and some escrowed fees for taxes and insurance as well.
 
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