I bought a SFH with 40k about 1 year ago which has been rented for 750/month. I am trying to get refinance on it with a bank. The loan amount will be 60k with appraised value of 80k. The monthly payment is about $300 with 4.500% rate which gives me margin of $50 to $100 per month approximately. I just found total cost to originate the loan will be about $4000 including first 4 months of insurance and taxes. Do you think it is worth to get this loan with cost of $4,000?
That pretty high percentage of the loan . I guess it depends on what you plan on doing with the money. If you plan on turning into piles of cash, it was a good idea.
Work out the number of months of extra cash flow it will take to break even with the initial refinance costs.
Loan origination fee of $4,000 on a $60k note is pretty high in my opinion. Also, what is the purpose of your refi? From what info you provided, it sounds like you'll be getting some cash out of this. If you have a plan to put that cash to work and get a greater return than the $4,000 it cost to originate this loan, then it would make sense.
Also, keep in mind the amount of money you lose by refinancing and starting your amortization schedule over again. It'd pretty much mean this last year's worth of payments on your mortgage (unless I misunderstood your post and you bought it cash) are gone with the wind.
I always say focus on eliminating your mortgage rather than periodically refinancing.