Refinancing an SFR...need input

[Lydia B.]

I'm in the process of refinancing a SFR. The new loan company told me yesterday that they would need a higher coverage amount in order to fund the loan (this news one month into the friggin process). When we originally figured the new payment based on the current insurance amount, I would have saved a little over $100 a month and received about $2000 cash back. Here are the numbers based on a higher insurance:

Current Loan: $485 P&I + $190 Escrow = $675 monthly payment

     New Loan: $402 P&I + $223 Escrow = $625 monthly payment

Now there's only $50 dollar per month savings, a little less than $2000 back.  At first it made perfect sense, but now not as much.  I need your input on this...is it worth it, since I'd be loosing equity on loan origination fees??