[quote=Russell]APR is 4.75%.Monthly P&I payment drops by about 12%. The new 30 years has a lower total finance cost than the current remaining 28 years, not that it is likely that either loan would be around that long.[/quote]
Well then, Russell, your refi seems to be a “true” no-cost loan to you, as the borrower.
Someone has to pay for your short-term (ALTA) title rate and your escrow fee and appraisal. Even if your lender has contracts with these service providers, they must still be pay these costs and also draw your docs for “free.”
What kind of interest rate could you now get from the same lender if you paid your own closing costs and how much would those costs be?
I can see where you would save 12% mo. when your payments drop from being based upon 5.62% vs. 4.75%. However, going from 4.75 to 4.00 in the future may only result in about 7% addt’l mo. savings in your payment.
You state you are planning to refi again in a few weeks/months? if the 30-yr. fixed rates should hit 4%. Would you be willing to pay points and/or fees if this should happen? Are you aware that if you refi again, say, within a year of this refi you are doing now that your payoff demand on the future refi may be higher than your current demand, simply because your loan was recently recast back to 30 years?
I understand that you don’t care about starting your amortization over because you plan to sell and retire the loan at some point, anyway (even though you will owe your lender more at time of sale, depending on how many times you refi . . . even cost free). And I take it you have no age or retirement issues to consider?
I guess if you decide NOT to refi again because of the cost, your current refi is a “win-win” because you just reduced your payment by 12% at no cost to you and thus increased your monthly cash flow :=)
