We’re in the process of refinancing our house to a 15-year loan at 2.875%.
We’ll need a deposit amount to set up our new escrow account, and the amount I’m told we’ll need is $1,193. That money will be refunded to me from my current lender, supposedly within 30 days.
My lender gave me the option to roll that balance into my new mortgage, or bring a check for that amount.
If I added $1,193 to my loan, amortized for 15 years I’d pay $277 in interest! Also, my monthly payment would increase by $8, or $96 per year.
Good grief. We’ll write a check from our savings account to cover the escrow, and we’ll be refunded hopefully within a month. This move will save us a lot of money for just a brief inconvenience. I mean really — you can have that $1,193 for 30 days if it means I avoid paying on that amount for 15 years.
Our appraisal is coming up. Hopefully our house is worth what we paid, or we might have to come up with some extra cash to make sure we still have 20% equity.
Our closing costs:
- $251 for appraisal, credit report, flood certification, title insurance
- $70 local filing fee. Pfft.
- $325 to re-file for our Mortgage Credit Certificate, which we will pay with glee because the MCC will save us $6,100+ over the 15-year term on our federal taxes
- $1,193 for escrow account as mentioned above