First time homeowner considering refi, is it worth it?
In August 2012 I became a first time home buyer in Nevada. My rate is 3.75% on an FHA loan. The house was purchased in concert with a non-profit who provided $15K towards principle. I bought the house for $100K. The current loan balance is $79,277. The $15K that the non-profit provided amortizes over 5 years. I don't make any payments to the non-profit and don't have to pay them back at all. I pay $78 per month in MI which will auto drop off in September 2017, so I have $2418 MIP left. Current value of the house is approx. $145K.
Current payment is $597.49 ( P $136.72, I $247.32, Escrow $213.45)
My FICO is between 729 and 733. I am new at this so looking for some advice re the true cost of two quotes on the table. Any advice would be appreciated.
One question that I have is the difference between "initial note" rate and "APR" rate. Does the "APR" refer to the rate including the closing costs? For the 1st year or for the life of the loan?
Is the “total cost” of the loan the “prepaid items” + “closing costs”? What about the commitment, application, tax, flood, Interest and Settlement fees?
Bank “A” quote:
- Conv 30 yr fixed, Initial note: 3.625%, LTV 55.47%, APR 3.78%
- Est. closing costs $2,613.50, Est. prepaid items $1,378.25
- Refi $79,277 + $2,613.50 + $1,378.25 (- $68 dis.) = $83,200 Total Cost/ Loan amount
- Payment: $515.26 (P&I $379.43, Haz Ins $57, RE tax $78.83)
Bank “B” quote:
- Conv 30 yr fixed, Initial note: 3.875%, APR 3.986%
- Est. closing cost $1,955.00, Est. prepaid items $926.26
- Refi $79,277 + $1,955 + $926.26 = $82,158.26 Total Cost
- Loan Amount $83,000 ( -$841.74 cash back / refund to me of closing costs)
- $83,000 - $1,303.04 (Fees: commit, app, tax, flood, Int, settlement) = $81,696.96 Amount Financed