Refi terms - closing costs seem high to me

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jenig0013
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Joined: Sat Aug 02, 2014 10:52 pm
Location: Central Florida

Refi terms - closing costs seem high to me

Post by jenig0013 »

I probably locked into a refi rate too quickly and now I’m not sure I’m happy. I’m having a hard time comparing costs because of how things are labeled. Let me know your thoughts.

Loan amount 360000
Interest 3.125 (down from 3.865)

Origination fee: 3081
Appraisal fee: 450
Title stuff: 1776 (I know I can shop around for this)
Total loan costs: 5307

Taxes and government fees: recording fee 223 and transfer tax 1980
Initial escrow payment at closing: 4134

Thanks so much if you’ve made it this far. Im sure this is a very elementary bogleheads question.
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whodidntante
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Re: Refi terms - closing costs seem high to me

Post by whodidntante »

That seems high to me too.
SirBotsALots
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Re: Refi terms - closing costs seem high to me

Post by SirBotsALots »

Agreed. You're likely paying points in the origination cost to get the rate down to 3.125. Might be worth it if you have long expected time horizon in your house.
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jenig0013
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Location: Central Florida

Re: Refi terms - closing costs seem high to me

Post by jenig0013 »

SirBotsALots wrote: Fri Mar 20, 2020 9:53 pm Agreed. You're likely paying points in the origination cost to get the rate down to 3.125. Might be worth it if you have long expected time horizon in your house.
Hard to say in the current economic climate. Probably 4 years or more.
TropikThunder
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Re: Refi terms - closing costs seem high to me

Post by TropikThunder »

jenig0013 wrote: Fri Mar 20, 2020 9:59 pm
SirBotsALots wrote: Fri Mar 20, 2020 9:53 pm Agreed. You're likely paying points in the origination cost to get the rate down to 3.125. Might be worth it if you have long expected time horizon in your house.
Hard to say in the current economic climate. Probably 4 years or more.
Is your origination fee itemized, or is it just listed as literally “origination fee”? >$3,000 is obscene unless you’re paying points to lower the rate as SirBots said. What did the other options look like (cost vs rate) that they gave you? Compare the points vs rate and see where your break-even point is. For example, if you're paying $2,000 in points to lower your monthly payment by $50, that's 40 months to break even.
Topic Author
jenig0013
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Joined: Sat Aug 02, 2014 10:52 pm
Location: Central Florida

Re: Refi terms - closing costs seem high to me

Post by jenig0013 »

So when we first got the quote, he said $1719 (was given without regard to the current value of our home). Rate were jumping around a bit and when he got the loan to value number, he stated “The increase to the $3,081 stemmed from the change in loan to value when using the lower estimated market value and pricing in the market.”

Fine, whatever. But as you mentioned, the paperwork that we’ve now received mentions points (.856% of loan amount). NOTHING previous to this chat mentioned points.

We did shop around for the best rates and this is what we got, but the jump in origination rate and/or points is annoying, particularly since we are locked in now.
mega317
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Re: Refi terms - closing costs seem high to me

Post by mega317 »

Is this for a 30 year? I don’t think you can get that rate anymore so if rates jumped before you locked maybe they added the points because they thought you wouldn’t close at a new higher rate. Just speculating.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
ScubaHogg
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Re: Refi terms - closing costs seem high to me

Post by ScubaHogg »

FWIW, I’m doing a VA refinance. My total fees not including the va fee (which is set by regulation/law) is under $700.
“Unexpected Returns dominate the Expected Returns” - Ken French
Topic Author
jenig0013
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Location: Central Florida

Re: Refi terms - closing costs seem high to me

Post by jenig0013 »

mega317 wrote: Fri Mar 20, 2020 11:06 pm Is this for a 30 year? I don’t think you can get that rate anymore so if rates jumped before you locked maybe they added the points because they thought you wouldn’t close at a new higher rate. Just speculating.
I agree that’s likely what happened, but I feel like that should have disclosed.
michaeljc70
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Re: Refi terms - closing costs seem high to me

Post by michaeljc70 »

They seem high to me, but I haven't priced out rates lately. Obviously the rate and closing costs need to be looked at together. Is there really a transfer tax on a refi?
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