Question: Does this va streamline refinance offer make sense or seem right?

(Posted by: maberry21 on 2010-03-07 00:34:05)

I currently have a 30 yr. fixed rate at 6 %. Total loan amount $212, 100.00. Monthly payment of $1, 271. I have an offer to refinance (va streamline) at 5.25 %. Total loan amount $200, 996.00. Monthly payment of $1, 109.00 Savings: $162.00 a month I plan on paying all closing costs to keep my payment low and possibly make this place a rental. Fees include: Your adjusted Origination Charges: $2, 726 (interest rate charge) Your Charges for all other settlement services: $3, 831 (va funding fee, title: services/ insurance, tax deposit, daily interest charges) Total: $6, 557.00 This seems a bit high to reduce my rate by .75 %, I know as a guide you should always refinance at with 1 % or lower. The broker told me that this is impossible as they would actually loose money because VA mandates that they pay many costs. I really am not sure if this is a good offer as it seems I should be able to get a lower rate at a lower cost. All inputs are greatly appreciated. Thanks.

Posted by: Banana on 2010-03-07, 01:25:31

Origination charge seems way high to me but using the new GFE it includes appraisal, credit report, flood cert, tax service, etc. but still seems too high for that loan amount. Why are you using a broker instead of going directly to the lender? All in all you have to figure that your closing costs also include your first month's mortgage payment to the new lender & most likely 2nd 1/ 2 taxes for this year that you don't need to worry about. It doesn't sound bad but I would re-consider going through a broker.