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Is the following deal worth refinancing or is it too expensive?

I've owned my home for about 3-4 years now.  Original loan amount $213,000 at 6.75% 30 month fixed.  I'm paying around $1,740/month currently. I now qualify for the HARP program and owe roughly $203,000.  I was offered a 3.99% $208,000 30 month fixed which includes closing costs of about $2K, and my estimated property taxes that haven't been paid this year yet.  I've heard different terms thrown around such as LTV and others calculating numbers explaining to people that there supposed offer isn't "worth it" but I have no idea how this is calculated or if my deal is "worth it".  Any advice would be greatly appreciated.

Estimated value of the house used to be $210-230 and is now around 180-190.

Thanks!
Chris.
  • September 11 2012 - Charleston
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Answers (1)

The LTV refers to the loan amount as it pertains to the value of the home.  You can refinance under a HARP loan in some instance with as much as 150% of the value if the home.  If your loan amount is 208K and it is worth 180K, your LTV is approximately 115%.  The rate of 3.99% is pretty decent and so are the closing costs.  Based on your original loan amount and rate, your Principal and Interest (P&I) payment is around $1383.  A new loan amount of $208K at 3.99% brings your P&I down to approximately $991, saving you nearly $400.  Seems like a decent deal to me! Hope this helps.
  • September 11 2012
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