Refinance or not to refinance?

[Alvaro Rodriguez]

I would like to know if I’m making the right decision by refinancing or should I just leave it the way it is. Any feedback or advice is helpful

Closing cost is around $5k + 650(Appraisal) = $5,650.

Current situation:

Original loan:$176,000

Unpaid principal balance:$174,243

So I have paid down: $1,757

Interest rate: 4.87%

Principal and interest= $931 a month.

The house came back appraised at the same value as when the original loan was generated.

The two scenarios the lender is offering below:

Scenario 1: I have asked the lender to leave the same amount of the loan which is 79% of the price of the house. But I haven’t heard,

Under this scenario the interest rate would be 3.5% and interest+principal=$740

Which would be a $191 monthly saving

Is it worth paying $5,650 for closing cost for that interest rate and for $191 a month?

Scenario 2

The lender wants to increase the loan back to the original to $176,000, interest rate of 3.7% and the interest+ principal would be: $815

Which would be a $116 monthly savings.

However if we increase the loan back to the original $176,000 I would lose the $1,757 I have paid down from the principal.

In this second scenario I would be paying $5,650 of closing cost plus losing the $1,757 I already paid down for a rough total of $7400

Is this amount ok to get the interest rate reduced?

Thank you